A Long View Shows That the Global Downturn May Be Worse Than the Depression
HBR Daily Stat, Jan. 10, 2014
The global downturn that began in 2007 may turn out to be worse than even the Great Depression in many countries, Harvard economist Carmen M. Reinhart says in a report by The New York Times. Historically, it has taken an average of 7.4 years for advanced countries to recover from major economic crises, but many European countries are still contracting, nearly 7 years after the downturn’s start. The U.S., by contrast, has recovered well, mainly because investors and foreign countries were willing to lend money to the U.S. throughout the crisis, allowing American politicians to avoid the kinds of austerity measures that have hobbled other countries’ economies, Reinhart says.