<P> Differences explicitly pointed out between the recession and the Great Depression include the facts that over the 79 years between 1929 and 2008, great changes occurred in economic philosophy and policy, the stock market had not fallen as far as it did in 1932 or 1982, the 10 - year price - to - earnings ratio of stocks was not as low as in the 1930s or 1980s, inflation - adjusted U.S. housing prices in March 2009 were higher than any time since 1890 (including the housing booms of the 1970s and 1980s), the recession of the early 1930s lasted over three - and - a-half years, and during the 1930s the supply of money (currency plus demand deposits) fell by 25% (where as in 2008 and 2009 the Fed "has taken an ultraloose credit stance"). Furthermore, the unemployment rate in 2008 and early 2009 and the rate at which it rose was comparable to most of the recessions occurring after World War II, and was dwarfed by the 25% unemployment rate peak of the Great Depression . However, syndicated columnist and former Assistant Secretary of the Treasury Paul Craig Roberts claimed in a 2012 column that if all discouraged workers were included in U.S. unemployment statistics, the actual unemployment rate would be 22%, comparable to rates during the Great Depression . </P> <P> Nobel Prize--winning economist Paul Krugman predicted a series of depressions in his The Return of Depression Economics (1999), based on "failures on the demand side of the economy ." On January 5, 2009, he wrote that "preventing depressions isn't that easy after all" and that "the economy is still in free fall ." In March 2009, Krugman explained that a major difference in this situation is that the causes of this financial crisis were from the shadow banking system . "The crisis hasn't involved problems with deregulated institutions that took new risks...Instead, it involved risks taken by institutions that were never regulated in the first place ." </P> <P> On February 22, 2009, NYU economics professor Nouriel Roubini said that the crisis was the worst since the Great Depression, and that without cooperation between political parties and foreign countries, and if poor fiscal policy decisions (such as support of zombie banks) are pursued, the situation "could become as bad as the Great Depression ." On April 27, 2009, Roubini expressed a more upbeat assessment by noting that "the bottom of the economy (will be seen) toward the beginning or middle of next year ." </P> <P> On April 6, 2009 Vernon L. Smith and Steven Gjerstad offered the hypothesis "that a financial crisis that originates in consumer debt, especially consumer debt concentrated at the low end of the wealth and income distribution, can be transmitted quickly and forcefully into the financial system . It appears that we're witnessing the second great consumer debt crash, the end of a massive consumption binge ." </P>

Differences between the great recession and the great depression