Some scary charts over at VoxEU.org suggest it already is. There, economists Barry Eichengreen and Kevin O'Rourke remind that the Great Depression "was a global phenomenon" and our "Great Recession" has to be evaluated, at least occasionally, in similarly international terms. And the global picture, they say, has taken "an even uglier turn." Global stock markets, for instance, are taking a much larger hit in percentile terms than they did in 1929:
Yikes. Even scarier, though, is the sharp decline on global trading volume. "This is highly alarming given the prominence attached in the historical literature to trade destruction as a factor compounding the Great Depression," comment Eichengreen and O'Rourke. 
"To sum up, globally we are tracking or doing even worse than the Great Depression, whether the metric is industrial production, exports or equity valuations. Focusing on the US causes one to minimize this alarming fact. The 'Great Recession' label may turn out to be too optimistic. This is a Depression-sized event." Yikes. As they note, though, much of the Great Depressions pain was a function of its length. We've been contracting for a single year. We'd need four more to match the record of the 30s. "What matters now is that policy makers arrest the decline," they say. And here their graphs turn more positive. Central bank rates are not only diving faster but also starting lower than they did in the 30s:
And the various governments don't seem to be repeating the mistake of tightening the money supply amidst a recovery:
So that all looks good. Sadly, Eichengreen and O'Rourke don't quite come out and counsel us to relax. "The question now is whether that policy response will work," they write. "For the answer, stay tuned for our next column." That's going to be a helluva column...(Via Annie Lowrey.)
Yikes. Even scarier, though, is the sharp decline on global trading volume. "This is highly alarming given the prominence attached in the historical literature to trade destruction as a factor compounding the Great Depression," comment Eichengreen and O'Rourke. "To sum up, globally we are tracking or doing even worse than the Great Depression, whether the metric is industrial production, exports or equity valuations. Focusing on the US causes one to minimize this alarming fact. The 'Great Recession' label may turn out to be too optimistic. This is a Depression-sized event." Yikes. As they note, though, much of the Great Depressions pain was a function of its length. We've been contracting for a single year. We'd need four more to match the record of the 30s. "What matters now is that policy makers arrest the decline," they say. And here their graphs turn more positive. Central bank rates are not only diving faster but also starting lower than they did in the 30s:And the various governments don't seem to be repeating the mistake of tightening the money supply amidst a recovery:So that all looks good. Sadly, Eichengreen and O'Rourke don't quite come out and counsel us to relax. "The question now is whether that policy response will work," they write. "For the answer, stay tuned for our next column." That's going to be a helluva column...(Via Annie Lowrey.) 
