Monetary Interpretations of the Great Depression

Introduction

Frank Steindl asks why, despite much monetary work in the intervening years, it was not until Friedman and Schwartz put forward their monetary interpretation of the depth of the Great Depression that the monetary approach was rescued from disrepute and established as one of the most widely held explanations for the Depression.

Historical Context and Economists

To answer this question, the author explores the work of economists writing before Friedman and Schwartz. Among those investigated are Angell, Currie, Fisher, Hawtrey, Simons, Snyder, and Viner -- economists of the first rank. Other approaches examined include those of Harry G. Brown, C. O. Hardy, Lionel Edie, Willford King, Arthur Marget, Lloyd Mints, Lionel Robbins, James Harvey Rogers, and H. Parker Willis.

Analysis of Approaches

These analyses are examined in relation to the central elements of Friedman and Schwartz's framework, an analytical core that includes a money supply mechanism and an interpretation of the Federal Reserve's role in bringing about a dramatic decline in the money supply.

Findings

A central finding is that their monetary interpretation stands alone and was not anticipated. The notable exception is Warburton, whose work was largely ignored because of its lack of clarity.

Scientific Inquiry and Conclusion

Professor Steindl goes on to explore in terms of the nature of scientific inquiry why the other interpretations did not anticipate Friedman and Schwartz. This book will be of interest to monetary economists, especially historians of monetary thought, students of the Great Depression, and philosophers of science.