• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• BL Club
• Smartbuy
• Books

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

This refers to Senior Fellow, Peterson Institute for International Economics, Washington DC, Dr Arvind Subramanian’s remark that there is unlikely to be a repeat of the Great Depression of the 1930s in the US now (Business Line, December 19).

The Great Depression (1929-1933) in the US occurred partly because the policy-makers then were influenced by classical theories, which believed that ‘supply creates its own demand and there can never be glut or lack of demand in the economy’.

Also, they supported the laissez-faire (non-intervention by government in the economic affairs of the people) policy.

The Depression disproved the classical notion and gave rise to Keynesian economics, which stressed the government’s role in stimulating demand.

Today, the US has the experience and wisdom to recover quickly from recession and thereby prevent its economy from slipping into depression.

S. Ramakrishnasayee Ranipet

More Stories on : Letters | Economy

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Copyright © 2008, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line