The two financial crises of the past century, the 1930s Great Depression and 2008 Great Recession, occurred against the backdrop of sharp credit booms, dubious banking practices, and unstable global financial system. When markets collapsed in 2008, policymakers invoked the lessons of the Great Depression to avert the worst.

While their response prevented a financial collapse and catastrophic depression like the 1930s, unemployment in the U.S. and Europe still rose to excruciating high levels. Why didn't policymakers do better? The author shows how fear of another depression following the collapse of Lehman Brothers shaped policy responses, with both positive and negative results.