Does anyone know of any instance where von Mises, Rothbard, Hayek, or any other prominent Austrian ever discussed the 1920-21 depression in America, and the monetary or fiscal policy response to it?
I'm familiar with a Hayek piece from 1925 on much of the aftermath and the question of gold sterilization. I'm also familiar with a cursory treatment in Rothbard's History of Money and Banking in the United States. Is anyone familiar with anything else?
Thanks.
http://austrianeconomists.typepad.com/weblog/2009/10/hayek-on-deflation-and-the-great-depression.html
ReplyDeleteThanks for the link, Tom.
ReplyDeleteI'll have to revisit the Hayek piece from 1925. I didn't cite it too much for what I'm working on, because it didn't cover much of the 1920-21 depression itself. In the aftermath of the depression the United States was sitting on a lot of gold that had made its way from Europe. If I recall, Hayek spent more time discussing what to do about those gold reserves. What I did cite was insights from Hayek on the purpose of adjustments of the discount rate. His view was that of the old European view of central banking (not the American view) - that the discount rate should be adjusted to maintain the reserve requirements of the central bank itself. Granted, that doesn't have to contradict this view that he expresses in 1979 - I just have to do a little searching to see how that works in.
Thanks again.
Check out Tom Woods' history on the Depression of 1920. He does a fantastic job of explaining why inaction on the part of the Fed and Washington made for a clean recovery.
ReplyDelete- Mattheus