Abstract
Numerous business leaders such as Softbank CEO Masayoshi Son have recently expressed concern at the potential for the current COVID-19 pandemic leading to another Great Depression (1929-1931). This article compares four key economic indicators leading up to the Great Depression with current economic conditions in the USA and Australia to draw some insights and conclusions regarding the plausibility of this concern. The indicators for comparison are (1) household debt (2) real estate markets (3) stock markets and (4) business turnover. The main finding is that both periods share a common and disturbing narrative: that the prevalence of inflated asset prices (shares then, real estate now) have driven high rates of private consumption and debt, posing the risk that asset price deflation will lead to consumption collapsing resulting in sizable correction.
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