Hall of Mirrors: The Great Depression,The Great Recession, and the
Uses-and Misuses-of History
is Professor of Economics and Political Science at the University of California, Berkeley. His previous books include Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System and Golden Fetters: The Gold Standard and the Great Depression, 1919-1939.
The two great financial crises of the past century are the Great Depression of the 1930s and the Great Recession beginning in 2008. Both occurred against the backdrop of sharp credit booms, dubious banking practices, and a fragile and unstable global financial system.
When markets went into cardiac arrest in 2008, policymakers invoked the lessons of the Great Depression in attempting to avert the worst. While their response prevented a financial collapse and catastrophic depression like that of the 1930s, unemployment in the U.S. and Europe still rose to excruciatingly high levels. Pain and suffering were widespread.
The question, given this, is why policy makers didn’t do better. In Hall of Mirrors, Barry Eichengreen provides the first book-length analysis of the two crises in an effort to answer this question. Weaving together the histories of the two crises, he shows how fear of another Depression powerfully informed the response after the collapse of Lehman Brothers, with both positive and negative results. Bank failures having been a prominent feature of the Great Depression, policy makers moved quickly to strengthen troubled banks.
The Great Depression was the signal economic event of the 20th century and, we hope, the Great Recession will be the signal event of the 21st. Few people on earth can draw out the similarities and differences as well as Barry Eichengreen, who paints with equal facility in broad strokes and in fascinating detail. Reading Hall of Mirrors is a joy. Keeping it on your bookshelf for future reference is a necessity."
Alan Blinder, author of After the Music Stopped
“Historical analogies come cheap, but historical insight relevant to today is both rare and valuable. Barry Eichengreen's Hall of Mirrors is packed with the essential insights that give the reader understanding of the macro policy mistakes of the 1930s and the 2000s, both why they occurred and how devastating they were. A must-read.”
Adam S. Posen, President, Peterson Institute for International Economics
"Much of modern economics has ignored the study of economic history. Barry Eichengreen's Hall of Mirrors shows why that is a huge mistake. Combining fascinating narrative detail with cogent analysis of the relevant theory, it illuminates crucial parallels and differences between the causes of and policy response to the Great Depression and the Great Recession. It illustrates how good historical analysis must inform current policy choices, but also how superficial historic analogy can lead us astray. It carries powerful implications for the policies still needed to drive continued recovery from the Great Recession, and to stop us repeating in future the mistakes which led to disaster in the past."
Adair Turner, Senior Fellow, Institute for New Economic Thinking
Eichengreen the economist joined forces with Eichengreen the historian to produce a truly unique book that revisits the past in the light of current discussions and examines present issues in the light of past experience. Eichengreen demonstrates forcefully how important--but also how difficult--it is to learn from history. A must-read for all students of the global crisis but also for everyone interested in understanding why experience is no guarantee against policy errors."
Jean Pisani-Ferry, Professor, Hertie School of Governance (Berlin) and Commissioner-General for Policy Planning (Paris)
Barry Eichengreen will be speaking and signing books at the following events.
January 26 Coventry, UK, Warwick Economic Society, 5:30-7 pm
February 4 University of Edinburgh, Appleton Tower, lecture theatre 5, 11 Crichton St., 5:30-6:30 pm
February 5 Newcastle University, Insights Lecture, 5-5:30 pm
February 11 University of Oxford, Dept. of Economics, Manor Road lecture theatre,5-6- pm
February 16 The Cabinet Office, London, 3 pm
March 14 London, NESTA Future Fest
March 31 Washington DC, World Bank
April 1 Chicago, Chicago Council for International Affairs
April 6 San Francisco, Commonwealth Club