The general consensus is that a new Great Depression was avoided thanks to aggressive deficit spending by core capitalist governments. Moreover, there are also signs that the Great Recession may be ending (which is not the same thing as saying that good times lie ahead).
Two well known economists, Barry Eichengreen and Kevin H. O’Rourke, have been comparing contemporary movements in key variables with those during the depression. Their recent work (which incorporates February 2010 data) highlights the fact that despite improvement, world industrial production, trade, and equity markets remain significantly below their previous peak levels. More specifically:
- World industrial production “is still 6% below its previous peak. (At the trough it was 13% below its previous peak.)”
- World trade “remains 8% below its previous peak. (At the trough it was 20% below its previous peak.)”
- World equity markets “are now 25% below peak. (At their trough they were 50% below peak.)”