The Great Depression Summary

After reviewing Great Myth’s of the great depression, I came to conclude that the author strongly believed that government policies led to the overall cause of the great depression, and the main causes he used to state his case were the cycling of businesses, the disintegration of the economy, President Roosevelt’s New Deal, and lastly the Wagner act. Reed claimed that although the government did intervene in previous depressions, the Great Depression continued “…because the government compounded its initial errors with a series of additional and harmful interventions.” (Reed) , some of those harmful interventions being marginal lending leading to the Fed mismanaging, and inflating the money supply therefore causing the market to crash. Furthermore,

Like Reed, Cole and Ohanian focused on main causes that could have caused the Great Depression, but what differed was they two authors used real world shocks such they believed to have been pertinent to the business cycle during the depression, those shocks being technology, fiscal policy, and trade. Through the use of comparison charts, Cole and Ohanian explained and visually interpreted that technology input and output were predicted higher during the recovery of the depression than what actually took place. The fiscal policy shock argued once again similar to Reed, in that Roosevelt’s policy’s were seen to dramatically effect the economy, and its slow rise to recover. Lastly, the trade shock, as stated “Theory predicts that

Although the article didn’t dig deep into detail, the overall message was clear that although the Fed did purchase large amounts of bank securities, it didn’t ever effect the amount of circulation money within the united states, furthermore, the worry that many banks were going to collapse in turn created a public uproar of the want to turn holdings into cash, leading many banks to go bankrupt, and finally Milton Friedman brings into perspective his idea that "The Fed failed to inject enough money into the system to sustain the desired minimum level of monetary aggregates. Because it failed to do this, the public run on banks resulted in a contraction in the money supply, which caused the Great Depression." (Fed) weather this is to tell true or not, it brings into question by the author weather or not the Fed did enough to prevent the Great