Identify two similarities and two differences between the Great Depression and theGlobal Financial Crisis of 2007-2009

Similarities:

1. Both the Great Depression and the Global Financial Crisis of 2007-2009 were triggered by financial sector disruptions. In the case of the Great Depression, it was the stock market crash of 1929, and for the Global Financial Crisis, it was the collapse of the subprime mortgage market in the United States.

2. Both crises had global impacts. The Great Depression affected many countries, not just the United States. Similarly, the Global Financial Crisis had significant effects on economies around the world, not just in the United States where it originated.

Differences:

1. The policy response was very different in each case. During the Great Depression, the initial response was to tighten monetary policy, which many economists now believe only made the situation worse. In contrast, the response to the Global Financial Crisis was to quickly lower interest rates and inject liquidity into the system, which helped to stabilize the financial sector and prevent a complete economic collapse.

2. The duration and severity of the two crises were also different. The Great Depression lasted for about a decade and resulted in a significant decline in economic output and a sharp increase in unemployment. The Global Financial Crisis, on the other hand, was shorter and, while severe, did not result in as large a decline in output or as high unemployment as the Great Depression.