Tracking Two Depressions

Jul. 05, 2009 5:58 AM ETDIA, SPY, QQQ16 Comments
John Lounsbury profile picture
John Lounsbury

Henry Blodgett, writing at, has posted a 17 slide show of graphics from the ongoing research project of Barry Eichengreen and Kevin O'Rourke. Eichengreen is Professor of Economics and Political Science at the University of California, Berkeley; and formerly Senior Policy Advisor at the International Monetary Fund. CEPR Research. O'Rourke is Professor of Economics at Trinity College Dublin and CEPR Research Fellow.

This project is comparing an extensive number of economic measurements from June, 1929 forward with the same measurements starting April, 2008. One of the comparisons most favorable to the 2008-09 measurements is shown in the following graph:

See all 17 slides here.

This research project shows what a steep challenge the world faces to pull out of the current tailspin. The people worrying about further deflation in the coming year or two are getting my attention more than those worrying about inflation. These graphs tell a story of a patient in danger of bleeding out. Before we can worry about any other complications, the bleeding must be stopped.

This article was written by

John Lounsbury profile picture
John Lounsbury is Managing Editor Emeritus and Co-founder of Global Economic Intersection. Formerly provided comprehensive financial planning and investment advisory services to a small number of families on a fee-only basis. He has a background that includes 34 years with a major international corporation, 25 years in R&D management and corporate staff positions. More recently he was a Series 6, 7, 63 licensed representative with a major insurance company brokerage from 1992 to 2001. From 2002-2010 he operated his own sole proprietorship business. Specific interests include political and economic history, econometric analysis, and investment strategy analysis. Recreational activities include hiking, non-technical mountaineering, and alpine skiing. He was also a founding partner and former managing editor of 2010-2021.

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