A Monetary History Of The United States, 1867-1960 100%
The authors argued that the Depression was not a "market failure" but a "government failure." They blamed the Federal Reserve for allowing the money supply to shrink by one-third between 1929 and 1933.
The work served as the foundation for , emphasizing stable monetary rules over discretionary government management. It has had a lasting impact on central banking; former Fed Chairman Ben Bernanke famously conceded to the authors on behalf of the Federal Reserve: "You're right, we did it. We're very sorry. But thanks to you, we won't do it again". A Monetary History of the United States, 1867-1960
Populist efforts for bimetallism and the deflationary pressures of the late 19th century. The authors argued that the Depression was not
The transition from private clearinghouses to a centralized monetary authority. We're very sorry
The book contends that had the Fed maintained a steady money supply, the severe contraction could have been avoided or significantly mitigated. Key Historical Episodes Analyzed The book covers several distinct monetary eras:
They identified four critical errors, including raising interest rates in 1931 to defend the gold standard and failing to act as a "lender of last resort" to stop banking panics.
The book's most famous section, Chapter 7 (often published separately as The Great Contraction ), reinterpreted the Great Depression.