Soup kitchens. Dole queues. Jarrow marches. Bank failures. Trade wars. Falling prices. Desperate poverty. Dust bowls. Fascism. The long descent into war.
That was the 1930s, and it was the world conjured up by Christine Lagarde, the managing director of the International Monetary Fund on Thursday night.
A failure of the international community to co-operate to sort out Europe's sovereign debt crisis risked, she said, "retraction, rising protectionism and isolation. This is exactly the description of what happened in the 1930s and what followed is not something we are looking forward to."
Clearly not. But is Lagarde right? Are we really heading inexorably into a second Great Depression? Or is the head of the IMF, unwisely perhaps, making us all feel more depressed than we need to be?
There are certainly reasons to be concerned about the state of the world.
To the extent that a depression can be defined as a prolonged period of sub-trend growth, then what we have experienced since 2008 has been a depression.
Many countries – including Britain – have struggled to recover from the collapse of asset-price bubbles – and now face the prospect of double-dip recessions. Read on and comment » | Larry Elliott, economics editor | Friday, December 16, 2011
