Bloomberg Opinion columnist Noah Smith is among those broaching the possibility of a depression. The severity of this economic contraction, as he notes, probably already places it on a scale with the Great Depression. As I noted in NR recently, we can already see some signs that we are in for a prolonged period of elevated demand for money balances or, equivalently, of a depressed willingness to consume and invest.


There’s no universally accepted definition of an economic depression (or, I suppose, the psychological kind). If I recall Keynes correctly, though, an extended period in which this tendency lowers economic growth is a pretty good match for his. The good news, as I also note in that article, is that some of this is within the control of policymakers.