Paul Krugman has presented a graph with real GDP for the UK. It illustrates that the current crisis is worse than it was in 1929. I’ve also downloaded data from the Maddison historical data and the Conference Board total economic database, which has inherited the Groningen (read Maddison) database.
The idea was to compare GDP per capita estimates for the same periods in order to remove the effect of population growth. Surprisingly, I’ve got a different result. Figure 1 below demonstrates that the current evolution of real GDP in the UK is much better than after 1929. Moreover, the estimates of per capita GDP after 1929 show a deeper recession than in 2007. Unlike Krugman, I do not add GDP projections for 2012 to 2014.
In Italy, real GDP has a deeper fall after 2007 than after 1929 (Figure 2) but the estimates of real GDP per capita say that the quick recovery of real GDP was definitely driven by increasing population. The state of per capita curve in 2010 was very close to that in 1932, i.e. three years after start of the crisis.
Figure 1. The evolution of real GDP and GDP per capita in the UK after the 1929 and 2007 crisis.
Figure 2. The evolution of real GDP and GDP per capita in Italy after the 1929 and 2007 crisis.