What the 21st century can learn from the 1929 crash | Larry Elliott

It was the biggest setback to the global economy since the dawn of the modern industrial age. But did the world's reaction worsen the effects of the 1929 Crash? And have we learned from those mistakes?

As the summer of 1929 drew to a close, the celebrated Yale university economist Irving Fisher took to the pages of the New York Times to opine about Wall Street. Share prices had been rising all year; investors had been speculating with borrowed money on the assumption that the good times would continue. It was the bull market of all time, and those taking a punt wanted reassurance that their money was safe.

Fisher provided it for them, predicting confidently: "Stock markets have reached what looks like a permanently high plateau." On that day, the Wall Street Crash of October 1929 was less than two months away. It was the worst share tip in history. Nothing else comes close.

There are similarities between now and the 1930s, in the sense that you have a declining superpower

If Keynesian and monetarist economists agree on one thing, it is the disastrous consequences of deflationary policy

The Great Depression ushered in isolationism, protectionism, aggressive nationalism and totalitarianism

Related: Dali's enigma, Picasso's protest: the most important artworks of the 1930s