Barristas, Potters, Yoga Instructors and Depression Economics

Brad de Long has a great introduction to Depression Economics here. Can't wait for lecture 3.

Current Recession Vs Depression

CalculatedRisk has an interesting post on Depression Scares quoting prof. Robert Shiller. He notes the cumulative US GDP decline form peak is 3.3% so far vs down 10% for a depression. He adds further: "Even though the current recession is already one of the worst since 1947, it is only about 1/3 of the way to a depression (commonly defined as a 10% decline in real GDP). Stated another way, to reach a depression, the economy would have to decline at about the same annual rate as the last two quarters for the next four quarters."

Current Recession vs Great Depression

Paul Krugman compares industrial production now and then and comments: "At first, the current recession didn’t hit industrial production all that hard. But the pace accelerated dramatically last fall, so that at this point we’re sort of experiencing half a Great Depression. That’s pretty bad."