Leading Economist Predicts Great Depression in the 1920s; COVID-19 Pandemic Exacerbates Negative Economic Forces, Unleashing Next Global Economic Crisis
In a startling forecast published in Project Syndicate entitled, “The Coming Greater Depression of the 1920s,” NYU economics professor Nouriel Roubini outlines ten negative trends that ensure the inevitability of a full-fledge economic depression sometime during the current decade. Professor Roubini achieved notoriety for predicting with uncanny accuracy the Global Financial Crisis of 2007-09.
Roubini points out that even prior to the coronavirus pandemic there were downside trends involving structural issues left over from the financial crisis of 2007-09, coupled with deglobalization and the balkanization of supply chains, decoupling between China and the United States and other geopolitical rivalries, and environmental factors such as climate change. What the COVID-19 pandemic has done is accelerate and magnify those negative trends, which already have created a perfect storm, leading to a “greater depression” later on in the present decade.
The current economic crisis created by the coronavirus will bring about a severe, U shaped recession, which moist economists now believe will exceed the 2007-09 Global Financial Crisis in severity. There will be no V shaped recovery, in Roubini’s view. The most chilling aspect of Professor Roubini’s forecast is that even if the COVID-19 enabled recession eventually has a U-shaped recovery, it will only be temporary, with a 21st century Great Depression to follow in its wake, making the 1920s a time of Global Economic Crisis, with prospects of recovery being differed until the 1930s, all predicated on new technologies and the emergence of more competent political leadership.