The Great Recession & the Great Depression

Abstract

In the depths of the Great Depression, John Maynard Keynes wrote that “[p]racticalmen, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.”1 This acute observation is applicable to our current Great Recession as well. In fact, the newly discredited ideas are not all that different from the old, suggesting that Keynes may have overestimated people’s ability to learn from their mistakes.