Abstract
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.
However consistent may be the relation between monetary change and economic change, and however strong the evidence for the autonomy of the monetary changes, we shall not be persuaded that the monetary changes are the source of the economic changes unless we can specify in some detail the mechanism that connects the one with the other.
Friedman and Schwartz (1963b, p. 59)
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References
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Friedman, M., and Schwartz, A. J. 1963a. A Monetary History of the United States, 1867–1960. Princeton, N.J.: Princeton University Press, for the National Bureau of Economic Research.
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Temin, P. 1976. Did Monetary Forces Cause the Great Depression? New York: W. W. Norton.
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© 1981 University of Rochester Center for Research in Government Policy and Business
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Temin, P. (1981). Notes on the Causes of the Great Depression. In: Brunner, K. (eds) The Great Depression Revisited. Rochester Studies in Economics and Policy Issues, vol 2. Springer, Dordrecht. https://doi.org/10.1007/978-94-009-8135-5_4
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DOI: https://doi.org/10.1007/978-94-009-8135-5_4
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