The Economic Superbowl: 1920-1921 versus 1930-1931 - LewRockwell

The Economic Superbowl: 1920-1921 versus 1930-1931 - LewRockwell: It’s been said there’s no such thing as a controlled experiment in the social sciences, including economics.  But we had something close to a laboratory experiment back in 1920-1921 and 1930-1931. In each of these periods there was a depression.  Unemployment was high – for awhile — it was higher in the 1920s than in the 1930s.  Prices were falling in both periods. In the 1920-21 depression, the Federal Reserve Bank of New York crashed the monetary base, thereby reducing the money stock, and jacked interest rates to record highs. In the 1930-1931 depression, the federal reserve gradually increased the … Continue reading →