Current finance crisis less serious than 1929: Stiglitz

PARIS: The crisis now gripping world financial markets should be less serious than that of 1929, Nobel Prize laureate Joseph Stiglitz said today, because new "instruments" could prevent a depression.

"The general view is that we have instruments, monetary and fiscal policy, that we know how to prevent another great depression," he said.

A devastating stock market crash in the United States in October 1929 sparked a worldwide economic slowdown, which came to be known as the Great Depression.

However, Stiglitz, a former chief economist at the World Bank and long-standing critic of the International Monetary Fund, cautioned that "knowledge is not always translated into actions".

He argued, as an example, that during the Asian financial crisis of 1998 the "IMF had the knowledge how to prevent Indonesia from going into depression but took measures that actually led it into depression."