Authors: Adrian Blundell-Wignall, Vanessa Rossi, Carmen M. Reinhart, Vincent Reinhart, Klaus Abberger, Dean Baker, Justin Yifu Lin

Editorial: On the necessity of separating investment and commercial banking

by Adrian Blundell-Wignall

Forum: Is the Global Economy on the Brink of Recession?

by Vanessa Rossi, Carmen M. Reinhart, Vincent Reinhart, Klaus Abberger, Dean Baker, Justin Yifu Lin

In 1937, in the midst of the US recovery from the Great Depression, President Roosevelt
implemented spending cuts in pursuit of a balanced budget. Subsequently, the unemployment
rate jumped nearly 6 percentage points over the next year and the US economy re-entered
a major recession. In the midst of the current global recovery from the Great Recession,
European and American policymakers again seem intent on pursuing the path of budget
austerity. In light of slowing economic growth rates, shrinking consumer and business
confi dence, and stubbornly high unemployment fi gures, could it be that Western economies
are ignoring lessons from the past?