The Credit/Dollar Crisis and Recession Regulation

Abstract

The global recession is causing output contraction and unemployment in advanced countries, sharp reduction of growth in emerging and developing countries, and contraction of world trade in goods and services. The impact on output and employment is minute compared with the Great Depression of the 1930s. There is a section reviewing the literature on the Great Depression because of the significant rise of regulation and the constant reference to current events and policies. The origins of the credit crisis are critical in evaluating regulatory proposals. Monetary and fiscal policies in the current crisis are more aggressive than even during the Great Depression. The regulatory agenda is highly ambitious.