This paper compares the Great Depression and the current crisis. It builds on the existing knowledge about the problems which
have lead to the current crisis, and to what extent the problems were similar or different to those of the Great Depression.
The focus of this paper, however, is to report stylised facts about the depth of the crises (the extent to which GDP, manufacturing
production, employment, and stock prices dropped) and how economic policy reacted during the Great Depression and today. We
also investigate to what extent different regions were affected depending on the crisis and whether the synchronisation with
which the current crisis spread was larger this time due to globalisation. Finally, the probability of whether the fall in
production has levelled off in 2009 is assessed. How economic policy should react in this phase, specifically since unemployment
will stay very high (or will further increase) is also assessed.
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Forschungsbereich:Makroökonomie und öffentliche Finanzen