A Tale of Two Depressions?

Eichengreen & O'Rourke wrote back in 2009 a very popular post on Vox.eu here, updated in 2010 (and here) which suggested the different nature of the two events (one depression and a recession really). Their data was global. Looking at GDP, rather than industrial output, in the US alone, we have something like the figure below (data from Measuringworth).
Note that it's hard to compare the two events. Clearly automatic stabilizers like unemployment insurance do work. Also, the Fed reaction and the fiscal stimulus worked quite well, at least in precluding a collapse of output of the same proportions. And yes the pace of the recovery is much slower now than what it was when it finally started in the 1930s.


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