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Two Who Called the Great Depression: An Initial Formulation of the Monetary‐Origins View

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  • GEORGE S. TAVLAS

Abstract

The consensus view in the economics profession today is that the genesis of the Great Depression was the tightening of policy by the Fed in 1928 and 1929, mainly to stem the stock market boom. Nevertheless, monetary historians have not provided evidence that any economist writing prior to the stock market crash of October 1929 foresaw that the Fed's actions would lead to a major depression. This paper shows that two economists, William Foster and Waddill Catchings, co‐authored a paper in July 1929 containing arguments strikingly similar to the present consensus view. Their critique of Fed policy supports the view that the genesis of the Great Depression had monetary origins and was preventable.

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  • George S. Tavlas, 2011. "Two Who Called the Great Depression: An Initial Formulation of the Monetary‐Origins View," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43(2‐3), pages 565-574, March.
    • Handle: RePEc:wly:jmoncb:v:43:y:2011:i:2-3:p:565-574
    DOI: 10.1111/j.1538-4616.2010.00386.x
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    1. James R. Lothian & George S. Tavlas, 2018. "How Friedman and Schwartz Became Monetarists," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 50(4), pages 757-787, June.
    2. George S. Tavlas, 2015. "In Old Chicago: Simons, Friedman, and the Development of Monetary‐Policy Rules," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 47(1), pages 99-121, February.
    3. George S. Tavlas, 2016. "New Perspectives on the Great Depression: A Review Essay," International Finance, Wiley Blackwell, vol. 19(3), pages 353-374, December.
    4. George S. Tavlas, 2015. "In Old Chicago: Simons, Friedman, and the Development of Monetary‐Policy Rules," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 47(1), pages 99-121, February.
    5. Karau, Sören, 2020. "Buried in the vaults of central banks: Monetary gold hoarding and the slide into the Great Depression," Discussion Papers 63/2020, Deutsche Bundesbank.

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