Working Paper: NBER ID: w15645
Authors: Peter Temin
Abstract: This paper discusses parallels between our current recession and the Great Depression for the intelligent general public. It stresses the role of economic models and ideas in public policy and argues that gold-standard mentality still holds sway today. The parallels are greatest in the generation of the crises, and they also illuminate the policy choices being made today. We have escaped a repeat of the Depression, but we appear to have lost the opportunity for significant financial reform.
Keywords: Great Recession; Great Depression; Economic Models; Public Policy
JEL Codes: E32; E65; N12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| ruling economic theories (P19) | policy decisions (D78) |
| policy decisions (D78) | economic crises (G01) |
| economic imbalances + prevailing ideologies (P19) | economic crises (G01) |
| gold standard mentality (E42) | inability to adapt (I12) |
| outdated Enlightenment theories (B11) | economic policies (E69) |
| economic policies (E69) | housing boom (R31) |
| housing boom (R31) | housing market collapse (R31) |
| lack of consideration for collective shocks (D80) | severity of financial crisis (G01) |