I came across a Québécois blog that discusses my 1920-21 article. It's in French - I read it fairly easily with the help of Google Translate. The guy is a libertarian with Austrian sympathies, but seems to have generally liked my article and is in agreement that previous statements by Woods, Powell, and Murphy are far too strong (and in some cases - as with Harding's role - simply wrong). I quibble with his reaction on two points:
1. He agrees with me that the contractionary monetary policy was consistent with Keynesianism, but he thinks Keynes would have recoiled immediately upon the appearance of deflation. In other words, he feels that Keynes would stop the inflationary run-up but would have no interest at all in restoring a more appropriate price level from the recent past. I would disagree.
2. He says that 1920-21 is consistent with ABCT. I don't disagree with this in my article, but I would be more nuanced. Nothing that I have seen demonstrates the incompatibility of 1920-21 with ABCT, but we have a very long way to go until we can say that it is a good example of ABCT. I know of no work that actually shows there was a distortion of the capital structure as a result of low interest rates at this time. I know of no work that actually shows that the readjustment of these distortions is the source of the depression. I know of no work that shows that recovery would have been possible without an easing of monetary policy by the Fed. ABCT is not out of the running, but a lot more work needs to be done to call 1920-21 an Austrian downturn.
Profitez de l'article de blog!