Look: I am eager to learn stuff I don't know--which requires actively courting and posting smart disagreement.

But as you will understand, I don't like to post things that mischaracterize and are aimed to mislead.

-- Brad Delong

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Sunday, February 5, 2012

Revisiting the 1920-21 Depression

I've looked a this before, here, here, here, here, and here.

I am very happy to see my take validated, and the Austrian case rebutted by David Glasner.  He links to a short, fact-filled Journal article by David Kuehn that totally blows up the Austrian case that the 1920-21 event refutes the Keynesian approach of the 30's.

To summarize -

-  The Austrians have the historical facts wrong about 1920-21.
-  The 1920-21 depression was a supply-induced event, while the 1929-on depression was an aggregate demand shortfall event, as was the 2008-on Great Recession.
-  Fundamentally different problems arising in fundamentally different circumstances call for fundamentally different policy solutions.

Glasner and Keuhn are both very polite and circumspect in their treatment of Austrians, so for just this once, I will be, too.

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