Is a 1930s-style depression avoidable?

Link to the article: Channel 4

Last Modified: 16 Mar 2009
By: Faisal Islam

A 'depression era' deflationary spiral is avoidable if there is political will to tackle the crisis, say the US federal reserve and the Bank of England.

The good news is that we've avoided a 1930's style depression - that's what Ben Bernanke, chairman of the US Federal Reserve has said. He said that the he expects the US economy to decline less slowly at the end of this year, and recover in 2010.

He warned that the recovery will only happen if there is enough political will to solve the problem. Today the Bank of England said that a bout of falling prices doesn't necessarily have to turn into a 1930's style deflationary spiral - as long as the authorities act 'promptly and decisively'.