Compare (and contrast) the speeches given by Christina Romer “Lessons from the Great Depression,” and by the Chairman of the Fed, Ben Bernanke “Economic Policy: Lessons from History.”

Today the US economy faces a great recession times, that is sometimes called “worst since the Great Depression” period. A lot of economists draw some connections with the financial collapse of the Great Depression period, trying to point parallels and differences between that crisis of the 1930s and the recent one.
On that topic we can see a speech by Council of Economic Advisers Christina Romer “Lessons from the Great Depression” and also speech by the chairman Ben Bernanke “Economic policy: lessons from history”.
Christina Romer in her speech compares the current recession with those experienced in the 1930s, first of all in order to provide some crucial perspective, because there are parallels that make it a useful point of comparison and a source for learning about policy responses today. (Christina D. Romer)
Firstly, Christina Romer draws parallels in the fundamental causes of both depressions: the first is the decline in asset prices and the failure of financial institutions, and the second is that this decline is over the world and touches a lot of countries.
So modern policymakers can really get usefull lessons for the faster and better recovery.
As for the Ben Bernanke opinion, he points out first of all economic issues of the past and present depressive situation, and doesn’t think that modern policy makers should use the past practices to overcome the depression. No, he even stresses that “history is never a perfect guide”. He makes few examples that the problems of the past and recent may be similar, but the approaches to their solving should be different. As times changes, the economic policies should also change, due to the differences in the whole world situation, in political situations, in the presence of new methodological principles.
So we may say that Romer and Bernanke share rather similar points of view of the Great depression lessons for today’s economic recovery. Though in fact they have some different approaches: as Romer studies the problems and their decisions in the past from the point of view of a historic, making analysis and pointing the results; but Bernanke considers the same problems and their solutions as economists, from the point of view of modern economic situation.

So Ben Bernanke draw four relevant lessons from the financial collapse of the 1930s: 1) economic prosperity depends on financial stability; 2) policymakers must respond forcefully, creatively, and decisively to severe financial crises; 3) crises that are international in scope require an international response; 4)history is never a perfect guide. (Ben S. Bernanke)
Christina Romer in her speech “Lessons from the Great Depression” tries to explain the main historical lessons from the Great Depression of the 1930’s, that can be used for the sooner recovery from the current depression that American economy faces. He points such lessons: 1) a small fiscal expansion has only small effects; 2) monetary expansion can help to heal an economy even when interest rates are near zero; 3) beware of cutting back on stimulus too soon; 4) financial recovery and real recovery go together; 5) worldwide expansionary policy shares the burdens and the benefits of recovery. (Christina D. Romer)
So, historical lessons of the past can be very useful, but not of them can by applied to nowadays situation, and not all of them will be so effective and bring the same results as in the past.
As for the outlooks on the current recession in the worlds economy, and particularly in the USA economy, which began in December 2007, Ben Bernanke and Christina Romer have quite different approaches to it. Bernanke speaks that International crises require an international response, and “the world’s economies and financial systems would sink or swim together”.(Ben S. Bernanke)
He speaks about modern economic situation, about current steps taken by the government and financial institutions, about the decisions of The Federal Reserve and the banking system.
On the other hand, Christina Romer mostly analysis the past steps made to recover from the depression, shows their effectiveness. She speaks about the government of Roosevelt, his policy and compares it to the one that Obama does today. She shows the historical statistics of the 1930’s, like employment situation and stock exchange data. Also Romer analysis Banking and Monetary Statistics of the Great Depression, and gives some historical references to the economists of that time.
As a conclusion, both Bernanke and Romer are quite optimistic about the recent recovery from the depression. Romer says: “We are starting from a position far stronger than our parents and grandparents were in in 1933. If we continue to heed the lessons of the Great Depression, there is every reason to believe that we will weather this trial and come through to the other side even stronger than before”.

 
Works cited
Ben S. Bernanke. “Economic Policy: Lessons from History”. Center for the Study of the Presidency and Congress, Washington, D.C., 2010
Christina D. Romer. “Lessons from the Great Depression for Economic Recovery in 2009”. Brookings Institution, Washington, D.C., March 9, 2009