Not So Good News

Green chutes optimism is misplaced. The economic crisis continues to deepen at a pace that is on par with or worse than that of the Great Depression, according to an updated analysis by economists Barry Eichengreen and Kevin O'Rourke. They conclude that even though "trade and stock markets have shown some improvement without reversing the overall conclusion - today's crisis is at least as bad as the Great Depression" (pointer via Mark Thoma).

Their first graph (below) tracks world industrial output leading them to conclude that: "World industrial production continues to track closely the 1930s fall, with no clear signs of 'green shoots."' They add that: "North Americans (U.S. & Canada) continue to see their industrial output fall approximately in line with what happened in the 1929 crisis, with no clear signs of a turn around."

Their second graph shows that even though global stock markets have rebounded a bit, they "are still following paths far below the ones they followed in the Great Depression."