A time to return to Keynes

Purpose – This paper seeks compare the current financial and economic problems with the problems facing the world economy in the 1930s. Design/methodology/approach – The paper argues that the Great Depression and the current problems have similar causes – excessive speculation, leading to a financial collapse that then results in an economic collapse. It then looks at the work of John Maynard Keynes to help solve the current problems. Findings – The paper advocates a large public works program plus a number of policies to help US homeowners and thereby stabilize housing prices. Originality/value – The paper provides a way out of the current economic and financial problems, and a way to avoid another Great Depression.