Blog Discussion: Economic Theories of the Great Depression
Which do you see? Post-World War I demographic shifts? A restoration of the gold standard? Poor monetary policy? ...a bat? As one of the most impactful financial collapses in world history, economic theories concerning the origin, nature, and close of the Great Depression. It has captured the minds of economists for generations: “to understand the Great Depression is the Holy Grail of macroeconomics.” [1] Practically, the Great Depression functions as an economic Rorschach test; so many factors were all at play before October 1929 – all realistically influencing the situation in some way or another – that economists can interpret the collapse according to whichever economic model they personally champion. As such, analysis of the crash becomes quite difficult, as so many conflicting narratives abound. One theory postulated since the onset of the Depression itself is that World War I was a direct antecedent to the Great Depression. It is essentially seen as an historic...
