There is still no universally accepted single cause of the Great Depression. But our analysis suggests that the main contender for the role of catalyst was the bursting of the bubbles in the equity and commodity markets, accompanied by falling house prices.

This undermined the ability of banks to lend and, interacting with other recessionary forces in a symbiotic way, caused widespread bank failures. This suggests that the causes of the Great Depression were worryingly similar to those of today's credit crisis.

Our conclusion ties in with the argument put forward by Friedman and Bernanke that the large contraction in global money supply was the critical factor. It may have been. But the key point is that most banks failed due to insolvency, most likely caused by the sharp falls in commodity, housing and equity prices and the resulting rapid rise in bad loans.

We have no doubt that other factors exacerbated the Depression. The US Federal Reserve and presidents Hoover and Roosevelt all pursued deflationary policies (in contrast to the widely-held belief that Roosevelt's actions ended the Depression).

But their actions were a response to a downturn in the real economy that was already in place, meaning they cannot be the cause. The same is true of the lurch towards protectionism.

That said, protectionism surely made things worse, and together with the Gold Standard, spread the pain around the world.

This time around, the response of those in charge of interest rates and fiscal policy has been quicker and more aggressive than during the Great Depression. What's more, governments have not let large numbers of banks fail, and key currencies have been allowed to depreciate, in contrast to conditions under the Gold Standard.

Much depends on whether these actions work. In particular, a lot depends upon the preparedness of the authorities on both sides of the Atlantic to pursue money-financed fiscal expansion as much as is necessary.

At the moment, a repeat of the Great Depression does not look like a central case. But the risk is significant. And the severity of the implications means it is a risk worth taking very seriously.

Roger Bootle is one of Britain's best-known economists and is managing director of Capital Economics Europe