Friday, February 3, 2012

Another Look at What 'Worked' in the Great Depression


Here is a fairly simple picture of some of the major metrics during the Great Depression.  Too simple yes, but it tracks most of the major indicators.

Hoover followed a policy of 'deleveraging,' that is, allowing for the economy to liquidate its prior excesses without changing much else. The Fed did respond to this crisis by expanding the monetary base fairly significantly as you can see.

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