Greece’s crisis-stricken economy has returned to growth following six years of recession, official data showed Friday, marking an end to one of the steepest and longest economic contractions in postwar European history.
But Matt O’Brien warns that “Greece’s comeback, like its collapse, will be nasty, brutish, and long”:
Greece’s depression … is still nowhere near done. You can see that easily enough in the chart above, which I’ve modified from The Economist. It compares Greece the past few years with what used to be the gold standard of economic catastrophe: the U.S. during the Great Depression. Now, Greece’s economy fell marginally less than America’s did back then — around 27 percent at its worst — but the biggest difference between the two is the slope of the recovery. The U.S., as you can see, rocketed back once FDR devalued the dollar and started spending more. Only the double whammy of premature fiscal and monetarytightening knocked it off track in 1937.
Greece, though, has gotten nothing but fiscal and monetary tightening.