This paper provides a historical perspective on the current crisis, contrasting the old with the modern. We identify the growth of the nonbank financial sector (a shadow banking system) that was not regulated by the central bank or covered by the financial safety net as a key modern twist,...

The Great Recession that started in 2008 has drawn constant comparisons with the Great Depression that unfolded in 1929. This paper documents how the response of policy makers in the current episode has been markedly different from the one observed in the 1920s and 1930s and to what extent this...