Insight 1: Recession or Depression? Economists have compared this crisis with other his-torical after the peaks in world industrial production, which occurred in June 1929 and April 2008 respectively). The global economy is tracking or doing even worse than the Great Depression, whether the metric is indus-trial events for insights into transmission mechanisms and policy lessons as to how policy-makers can best combat current economic challenges. Figure 1 com-pares production, exports or equity valuations. Focusing on the US causes one to minimize this fact. That said, we are presently only one year into the current crisis, whereas after 1929, the world economy continued to shrink for three successive years. What matters now is that policy-makers arrest the decline. the economic crisis with the Great Depression. Figure 1 shows that global industrial production tracks the fall in the 1930s, with no clear signs of ‘green shoots’. The decline in industrial production over the last nine months is as severe as in the nine months following the peak in 1929 (Figure 1 tracks behavior Source: “A Tale of Two Economic Depressions”, Market Oracle, 23 June 2009: http://www.marketoracle.co.uk/Article11516.html World Industrial Output, Now versus Then Figure 1 100 95 90 June 1929=100 April 2008=100 June 2009 update World industrial output 85 80 75 70 65 60 0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 Months into the crisis Source: Eichengreen & O’Rourke (2009), IMF. Note: Data show global industrial production for 1929/30 and 2008/09. 17