Potential Economic Disaster on the Scale of the Great Depression: A Romanian Expert’s Viewpoint

In an exclusive interview, Romanian expert, Professor Bogdan Glăvan, shares his concerns about the possibility of an economic crisis that could mirror the Great Depression of the 1920s. He notes that despite the lessons learned from the past, similar economic conditions and strategies are being repeated, potentially leading to a similar disastrous outcome.

Lessons from the Great Depression

On October 24, 1929, a day known as “Black Tuesday,” the US stock market experienced a significant decline, marking the beginning of the Great Depression. This economic crisis had a significant global impact, leading to millions of people losing their jobs. Despite this historical event being nearly a century old, Professor Glăvan believes that humanity hasn’t learned much from this economic catastrophe.

The Danger of Over-Regulation and Artificial State Intervention

Professor Glăvan, a renowned expert in macro and microeconomics, development economics, and monetary economics, argues against over-regulation and artificial state intervention in the economy. He asserts that these factors were significant contributors to the Great Depression and could potentially trigger a similar crisis today. The professor contends that if the necessary measures had been taken during the Great Depression, the crisis could have been mitigated, if not entirely prevented.

The Role of Excessive Money Injection and Credit Manipulation

According to Professor Glăvan, economic crises such as the Great Depression and the financial crisis of 2009 are the inevitable result of distortions caused by injecting excessive money into the economy and manipulating interest and credit. When the interest rate is artificially low for an extended period, this can create economic distortions and a credit explosion that is not in line with the economy’s natural propensity towards saving and consumption.

Current Economic Conditions and the Risk of a Repeat Crisis

While the professor acknowledges that the current economic situation is different from the episodes discussed, he highlights some alarming similarities. He draws parallels between the current economic conditions and those of the 1980s when America had to curb rampant inflation by raising interest rates. He warns that a similar situation today could trigger a chain of bankruptcies and debt crises, as it did in the past.

Conclusion

In conclusion, Professor Glăvan’s analysis serves as a stark reminder of the importance of learning from economic history to prevent a repeat of past disasters. His insights shed light on the potential risks associated with over-regulation, artificial state intervention, and excessive money injection into the economy. Recognizing these factors and taking appropriate preventive measures could help avert a crisis on the scale of the Great Depression.