Sometimes History Bites

By now there should be broad agreement on one point in the grand debate on macroeconomics. A recession born of a severe financial crisis is an especially destructive force, and one that isn't easily solved. Irving Fisher outlined the basic problem more than 80 years ago in his prophetic paper "The Debt-Deflation Theory of Great Depressions. The blowback cycle of unusually deep recessions and protracted recoveries after acute turmoil in the financial sector is a familiar syndrome, as economists Carmen Reinhart and Ken Rogoff detail in This Time Is Different: Eight Centuries of Financial Folly.