Indeed, in a historical context, some of my own research on the Great Depression showed that countries such as the United States that, for institutional or other reasons, suffered severe banking problems, had significantly worse depressions than countries in which the banking system was more stable, such as Great Britain. 2 The lesson has been learned.
In the current episode, in contrast to the 1930s, policymakers around the world worked assiduously to stabilize the financial system. As a result, although the economic consequences of the financial crisis have been painfully severe, the world was spared an even worse cataclysm that could have rivaled or surpassed the Great Depression.