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The global economy can survive the Great Depression?

Milton Friedman (MiltonFriedman) the lessons from that event should be. Policy response seems to indicate that the disaster will not happen again. Profs Eichengreen and O'Rourke describe this difference. During the Great Depression, seven major economies,UGG Boots Outlet, the weighted average discount rate never fell below 3%. Today, interest rates close to zero. Even the most hard-line large central banks of the European Central Bank (ECB), has lowered its rate by 1%. Similarly, the money supply collapsed during the Great Depression. But this time it continues to grow. Indeed, strong growth in money supply, combined with the deep recession, it is doubtful monetarist interpretation of the Great Depression. Finally, the fiscal policy more aggressive. The early 30s of last century, 24 major national deficit of less than the weighted average of GDP (coP) 4%, while today the figure is much higher. In the U.S., the general government deficit is expected to approach 14% of GDP. All of these are associated with the University of Maryland (UniversityofMary1and) Carmen Reinhart (CarmenReinhart) and Harvard University (Harvard) Kenneth Rogoff (KennethRogoff) classic paper has been consistent. L financial crisis, made a deep bow of economic crisis. The impact of the global financial crisis should be particularly serious. In addition, Recession arrived, out of control lending to the private sector, public spending and debt into the mountains. Strength of the sharp decline of government will not accept this option. The problem is that today's unprecedented fiscal stimulus will offset the financial crisis and the private sector in the United States and elsewhere an unprecedented accumulation of debt. If you can cancel, we will soon see from the Overseas Economic Review 25 Enemy track of the international trend of the Great Depression, if not we will not see this situation. What everybody hopes is obvious. But what should we expect? We see a race between the private sector repair their balance sheets and global rebalancing of demand, on the other side is the sustainability of stimulus. Only in the over-indebtedness of households, excessive borrowing and the capital shortage of the enterprise's financial sector after the balance sheet repair,ugg stiefel, or high savings rate countries to increase consumption or investment, strong demand in the private sector to recover. All of these are not likely to happen soon. Indeed, taking into account accumulated over the past 10 years, different levels extraordinary debt levels, this process is more likely to continue for many years. For example, in the past two quarters, U.S. households pay only 3.1% of the debt. Deleveraging is a time consuming process. Meanwhile, the U.S. has become the only major borrowers. Similarly, the Chinese Government to quickly expand investment. But through policies to increase the difficulty level of consumption is relatively big. Situation is likely to occur,UGG ブーツ, the global economy needs radical monetary and fiscal policies of the time, far more than many people expected. This will enable policy makers and investors nervous. Thus there are two opposing risks. One is the quick stimulus is withdrawn, as the last century 3O's and Japan in the late '90s did. This will enable the economy back into recession, because the private sector is still unable or unwilling to spend. Another risk is too late to remove economic stimulation. This would lead to a loss of confidence in the stability of monetary policy, even worse is that people worry about the sustainability of public debt, especially in the United States provided the world's key currency country. In extreme cases,oakley sunglasses, the dollar price of commodities soaring government debt and long-term interest rates could make the U.S. and global economy into stagflation unfavorable situation. In contrast with some alarmist, now I can not see signs of panic, but it might happen. Last year,ugg boots italia, the global economy into a recession. Countries in implementing large-scale policy responses. However, those who believe we are in the private sector, led by the strong recovery in the beginning, almost certainly been deceived. The process towards a full recovery is likely to be long, difficult and uncertain. (Author: Martin. Wolf) implementation of the Asian-led global economic recovery will take time U.S. The Time the worst economic downturn, dial the game began. The good news is that the deterioration of the global economy is slowing. The bad news is good news that this is not surprising. 26, 2008 level of overseas economic i