Quote

Importantly, in the 1930s, in the Great Depression, the Federal Reserve, despite its mandate, was quite passive and, as a result, financial crisis became very severe, lasted essentially from 1929 to 1933.

The 1930s had been a time of tremendous economic distress. And the unemployment rate was enormously high by any historic standard.

We certainly had an upheaval at the start of the Great Depression, and that resulted in a lot of financial reform, but it wasn't done in one stroke, and it wasn't done immediately. The Depression was in 1929 and resulted in the Securities and Exchange Act of '33, '34, '35, '37, '39, and '41.

The Depression was an incredibly dramatic episode - an era of stock-market crashes, breadlines, bank runs and wild currency speculation, with the storm clouds of war gathering ominously in the background... For my money, few periods are so replete with human interest.

The most striking development of the great depression of 1929 is a profound skepticism of the future of contemporary society among large sections of the American people.

It's true that monetary policy was too lax for too long, and the government encouraged lending to people who were unlikely to repay their loans.

Inflation is lower and more stable and the real business cycle fluctuations are more modest.

The observation that money changes induce output changes in the same direction receives confirmation in some data sets but is hard to see in others. Large-scale reductions in money growth can be associated with large-scale depressions or, if carried out in the form of a credible reform, with no depression at all.

Understanding the true causes of the Depression, as well as the real economic record of the United States in the 1930s, is an essential ingredient in anyone's economic and historical education.

Monetary policy causes booms and busts.