Should-Read: Free Exchange: A decade after it hit, what was learnt from the Great Recession?

Should-Read: Free Exchange: A decade after it hit, what was learnt from the Great Recession?: “The success of those policies, and the relatively bearable recession that resulted, allowed governments to avoid more dramatic interventions…

…of the sort which, after the 1930s, gave the world half a century of (relative) economic calm. By reducing the need for radical innovation, the speed and efficacy of the response left the world economy less reformed and so vulnerable to the same forces that made the crisis possible in the first place. Several shortcomings stand out. In dealing with the Depression, governments ultimately discarded the gold standard, the global currency regime that helped propagate the disaster…. That would be less troubling had the world made itself more robust to future crises…. The stabilisation policies used in the Great Recession were vastly superior to those of the Depression. But today’s governments have done a worse job of learning from experience than did their forebears…. The Depression enabled radical change by discrediting untrammelled capitalism and the elites who supported it…. Ten years on, the hopes of radical reform are all but dashed. The sad upshot is that the global economy may have the opportunity to relearn the lessons of the past rather sooner than hoped.