"Under the New Deal, the US economy grew at rapid rates, even for an economy in recovery." (Eric Rauchway, The Money Makers, p. 100.) Before I start telling you what "the New Deal" did and didn't do, I had better make clear what I mean by the…
The Cato Institute's newest book, Gold, the Real Bills Doctrine, and the Fed: Sources of Monetary Disorder, 1922–1938 is out now—and it's already getting rave reviews for challenging conventional wisdom on the Great Depression. In Gold, the Real Bills Doctrine, and the Fed, preeminent monetary historians Thomas…
Introduction Understanding what caused the Great Depression of 1929-39 and why it persisted so long has been fairly characterized by Ben Bernanke as the “Holy Grail of Macroeconomics.” The fear that the financial crisis of 2008 would lead to a similar Depression induced the Fed to use…
This is a story we all know: the Great Depression was caused by market failure, the predictable fall-out from the excesses of the unrestrained, unregulated, Wild West that was the securities markets at the dawn of the 20th century. After all, before the 1930s, there was no…
From Keynes' "Open Letter to President Roosevelt," published December 16, 1933: "Rising output and rising incomes will suffer a set-back sooner or later if the quantity of money is rigidly fixed. Some people seem to infer from this that output and income can be raised by increasing…