Worse than the 1930s: Europe’s recession is really a depression

[The Minsky Moment]

You can see from the graph that the dip was not as steep.  It is not equivalent.

The failure to rebound though is a very serious problem, and a little hysterical rhetoric is probably warranted given the degree of complacency about this in the Eurozone.

[MadImmortalMan]

The failure to rebound from the dip is not a problem at all if the dip itself did not go down far enough to get below the theoretical trendline of the non-eurobubble growth rate. It merely means they hit the baseline trend laterally instead of vertically.


Edit: Which, if true, is a great victory for the EU and the ECB.

[DGuller]

You can see from the graph that the dip was not as steep.  It is not equivalent.

The failure to rebound though is a very serious problem, and a little hysterical rhetoric is probably warranted given the degree of complacency about this in the Eurozone.

That's a good point, and this is something that always bugs me.  Today's economy doesn't recover nearly as briskly as it did decades ago after recessions.  Should we blame Obama?  No, we should largely blame the fact that our GDP didn't contract nearly as badly as it used to in the first place.

[The Minsky Moment]

The failure to rebound from the dip is not a problem at all if the dip itself did not go down far enough to get below the theoretical trendline of the non-eurobubble growth rate. It merely means they hit the baseline trend laterally instead of vertically

No they are way, way below any conceivable trend line. The US is well above pre crisis GDP, even the UK is safely above.  The Eurozone is still safely below the economic output from 8 years ago.  There is only one word for that - disaster.

The talk about bubbles in this context is really a non sequitur.  "Bubbles" can arise in particular asset markets as optimism, and positive feedback effects drive up paper values.  But GDP represents real production of goods and services - it makes no sense to say the entire productive economy of a 300 million person economic bloc is a "bubble." Indeed looking Eurozone wide, there are measurable deficiencies in housing.  Thinking of eight lost years as some kind of medicine is exactly that kind of thinking that has killed the Eurozone.

[alfred russel]

Not that europe's recovery isn't really bad, but I think these values should really be adjusted for per capita amounts, or even more ideally per capita amounts for the age cohort from 18-70. Europe's population isn't growing as much as it used to, and to the extent it is growing, the growth is fueled by more old people and more immigrants from low productivity societies.