23/2010 Nicholas Crafts and Peter Fearon
This paper provides a survey of the Great Depression comprising both a narrative account and a detailed review of the empirical evidence focusing especially on the experience of the United States. We examine the reasons for and flawed resolution of the American banking crisis as well as the conduct of fiscal and monetary policy. We also consider the pivotal role of the gold standard in the international transmission of the slump and leaving gold as a route to recovery. Policy lessons from the Great Depression for today are discussed as are some implications for macroeconomics.
Oxford Review of Economic Policy