Debt, Deflation, the Great Depression and the Gold Standard (with Ronald W. Batchelder)

This chapter compares alternative explanations of the Great Depression: the Monetarist explanation of (Friedman and Schwartz,.A Monetary History of the United States, 1867–1960, Princeton University Press, 1963), the Austrian explanation of Hayek and (Robbins,.The Great Depression, Macmillan, 1934), various Keynesian interpretations, e.g., (Temin,.Did Monetary Forces Cause the Great Depression?, Norton, 1976), such eclectic interpretations as (Kindleberger,.The World in Depression, 1929–39, University of California Press, 1973) and Hughes (1981), and the monetary interpretation, contemporaneously expounded by (Hawtrey,.The Art of Central Banking, Longmans, Green, and Co, 1932) and (Cassel,.Crisis in the World’s Monetary System, The Clarendon Press, 1932). None of these explanations account for the events starting with the 1920–1922 depression through the 1929 stock-market crash and the subsequent Great Depression as well as that of Hawtrey and Cassel focusing on the attempt to restore the gold standard after World War I and increasing demand for gold following the sequential resumption of convertibility by central banks in during the 1920s.