Return to Book Page. Essays on the Great Depression by Ben S. Essays on the Great Depression 3. Few periods in history compare to the Great Depression. Stock market crashes, bread lines, bank runs, and wild currency speculation were worldwide phenomena--all occurring with war looming in the background.
This period has provided economists with a marvelous laboratory for studying the links between economic policies and institutions and economic performance. Here, Ben Bernanke has gathered together his essays on why the Great Depression was so devastating. This broad view shows us that while the Great Depression was an unparalleled disaster, some economies pulled up faster than others, and some made an opportunity out of it. By comparing and contrasting the economic strategies and statistics of the world's nations as they struggled to survive economically, the fundamental lessons of macroeconomics stand out in bold relief against a background of immense human suffering.
The essays in this volume present a uniquely coherent view of the economic causes and worldwide propagation of the depression. Hardcover , pages. Published April 24th by Princeton University Press first published To see what your friends thought of this book, please sign up.
To ask other readers questions about Essays on the Great Depression , please sign up. Be the first to ask a question about Essays on the Great Depression. Lists with This Book. May 27, Chris Barran rated it really liked it. Technical and worth a second read. I only read the sections on monetary policy, not the essays on labor and business cycles. His ideas about the depression are pretty much in line with what he seems to be doing at the Fed. This alignment has turned out not to be so true There was a significant and constant decrease in spending.
International policies in Europe and America that supported an increase in tariffs brought international trade to a standstill. Nations that owed America billions of dollars could not honor their obligations because of the effects of the depression. Despite these events, Americans continued to invest heavily in the stock market, which hit its highest mark in A decline began soon after and on 24th October , investors began to sell millions of shares in panic as the decline persisted.
The stock market crashed on 29th October Black Tuesday and investors including banks lost billions of dollars. The effects of the Great Depression were more severe in America but were felt across all world economies.
Investors in the stock market could not pay their loans. These included real estate companies. People demanded their deposits from banks in panic and as a result, there was less money in circulation. Before the beginning of the Great Depression the rate of the U.
This led to the emergence of hidden inflation, as the government printed new money for the rapid growth of the economy. Thus, as Edsforth , p. The situation occurred where the growth of labor productivity in industry declined, and the amount of pseudo-money bills, receipts, etc.
However, there is another point of view about the causes of the Great Depression. According to the Marxist approach, the Great Depression was preceded by the rapid growth of the U. Thus, from to the U. Conveyor production was invented, the stock market was rapidly developing, the number of speculative trading was growing, the real estate prices were going up McElvaine , p.
The increase in production of goods required the increase in the money supply, but the dollar was pegged to gold Bernstein , p. Another common view discussed by Marxist approach is that the responsibility for the Great Depression lies on capitalism and market economy, and only the intervention of the state led to the economic recovery of America Reed , p.
According to this simplified approach, America was smashed and pulled into the depression by the stock market, one of the pillars of capitalism. President Herbert Hoover, a supporter of the laissez-faire principle non-interference of the state in the economy refused to use the tools of state power, and as a result the economic situation deteriorated.
The conclusion seems obvious: A popular explanation of the stock market crash of is based on a criticism of using borrowed funds to buy securities. The authors of many historical studies argue that rampant speculation in shares was associated with the excessive use of leverage.
Moreover, the fall of the margin requirements began to rise, and borrowers had to pay in cash most of the cost of the purchased shares Smiley , p.
So, the argument about the leverage does not hold water. However, the manipulation with money and credit flows is an absolutely different matter. Most economists-monetarists, in particular the representatives of the Austrian school, note the close relationship between cash flow and economic activity. When the state makes cash and credit injections, interest rates fall at first. Companies invest this easy money in new projects in the production sphere and the commodity market is booming.
With the stabilization of the situation, the costs of doing business rise, interest rates are adjusted upward, and profits fall. Thus, the effect of easy money comes to naught, and the monetary authorities, fearing of price inflation, slow down the money supply growth or even reduce it. In any case, these manipulations are sufficient to deprive an economic card-castle of its shaky foundation Reed , p. According to Rothbard , such an increase of money and credit flows led to a reduction in interest rates, brought the indexes of the stock market to unprecedented heights and created the phenomenon of the roaring twenties.
Unrestrained growth of the credit monetary mass became what the economist Benjamin Anderson called the beginning of the New Deal — the well-known interventionist policy carried out later by the President Franklin Roosevelt.
However, other scientists doubt that the Fed move was the cause of inflation, and point to relatively stable prices for raw materials and consumer goods in , which, in their opinion, suggests that monetary policy was not so irresponsible Higgs , p.
Of course, a significant reduction of the high income tax rates under Coolidge helped the economy, and perhaps smoothed the price effect the FRS policy. The tax reduction stimulated investment and real economic growth, which further led to new technological breakthroughs and business inventions in terms of production cheapening. Undoubtedly, the booming growth of labor productivity had a stabilizing effect on prices, which would otherwise be higher Reed , p.
The actions of federal authorities in response to the recession only led to its aggravation Higgs , p. It was a complement to the Fordney-McCumber Tariff of , which led the American agriculture to a crisis in the previous decade. Smoot-Hawley Tariff, the most protectionist bill in the U.
Essays on the Great Depression [Ben S. Bernanke] on luvenagesov.ga *FREE* shipping on qualifying offers. Few periods in history compare to the Great Depression. Stock market crashes, bread lines, bank runs/5(28).
Few periods in history compare to the Great Depression. Stock market crashes, bread lines, bank runs, and wild currency speculation were worldwide phenomena--all occurring with war looming in the background. This period has provided economists with a marvelous laboratory for studying the links between economic policies and institutions .
The Great Depression was horrendous, no other panic or depression that taken place before can add up to the economic and social devastation that The Great Depression inflicted. However before the Great Depression even happened there was a . Ben Bernanke's Essays on the Great Depression is a collection of 9 essays written in the 80's and 90's about the financial and labor markets during the 's. The essays are essentially a synthesis of prior work with greater mathematical rigor.
The great depression is an immense tragedy that took millions of people in the United States from work. Read full The Great Depression essay. This essay on the great depression highlights the events that led to this period in history. It offers an insight into the key individuals that played a role, and an analysis of causes and effects of this era.