publication . Part of book or chapter of book . Preprint . Report . 1997

Understanding the Great Depression: Lessons for Current Policy

Stephen Cecchetti;
Open Access
  • Published: 01 Apr 1997
  • Publisher: W.E. Upjohn Institute
Over the four years beginning in the summer of 1929, financial markets, labor markets and goods markets all virtually ceased to function. Throughout this, the government policymaking apparatus seemed helpless. Since the end of the Great Depression, macroeconomists have labored diligently in an effort to understand the circumstances that led to the wholesale collapse of the economy. What lessons can we draw from our study of these events? In this essay, I argue that the Federal Reserve played a key role in nearly every policy failure during this period, and so the major lessons learned from the Great Depression concern the function of the central bank and the fin...
free text keywords: Recession, media_common.quotation_subject, media_common, Great Depression, Unemployment, Economic policy, Fixed exchange-rate system, Government, Lender of last resort, Financial market, Economics, Deflation, jel:E58, jel:G28
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