Notes on the Causes of the Great Depression
There are two issues at hand in the discussion of the causes of the Great Depression, one substantive and one methodological. The substantive issue is simple: Friedman and Schwartz asserted (1963a) that the banking panic of 1930 was a major—probably the major—factor in turning an ordinary depression into the Great Depression. I contested that view and asserted (1976) that the banking panic of 1930 was not a major deflationary shock to the economy.
KeywordsInterest Rate Great Depression Money Market Nominal Interest Rate Money Balance
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