Alan Wood | October 10, 2008 ON Wednesday in Washington, the International Monetary Fund's chief economist Olivier Blanchard described the risk of another Depression as "nearly nil". Two weeks ago I argued the same view because of the lessons learned in the 1930s. I still think this is right, as governments in the US, Britain and Europe increasingly embrace a "whatever it takes" approach to restoring confidence in their financial systems, although a better co-ordinated approach would be helpful. However, the remarkable events of the past two or three weeks probably mean a deeper recession in the advanced economies. According to analysis of earlier financial crises in the IMF's latest World Economic Outlook, this one has the characteristics likely to be associated with a severe and protracted downturn. The difficulty is that...
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