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The Economic Superbowl: 1920-1921 versus 1930-1931
The Economic Superbowl: 1920-1921 versus 1930-1931
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It’s been said there’s no such thing as a controlled experiment in the social sciences, including economics. But we had something close to a laboratory experiment back in 1920-1921 and 1930-1931. In each of these periods there was a depression. Unemployment was high – for a while — it briefly was higher in the 1920s than in the 1930s. Prices fell in both periods.
In the 1920-21 depression, the Federal Reserve Bank of New York crashed the monetary base, thereby reducing the money stock, and jacked interest rates to record highs. In the 1930-1931 depression, however, the federal reserve gradually...
Source: https://www.newswars.com/the-economic-superbowl-1920-1921-versus-1930-1931/
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