In a recent article, “The Hoover-Roosevelt Depression Revisited,” work by Cole and Ohanian was highlighted because it comes to conclusions similar to, and thus reinforces historical work previously done by Austrians or fellow travelers (especially Murray Rothbard, Robert Higgs, and Richard Vedder and Lowell Gallaway), which explained the length of the Hoover-Roosevelt Depression.
Why is this work important to Austrians? The work, appearing in journals that even top mainstream economists cannot ignore, adds more evidence that the Austrians were right about the cause of the length of Great Depression, as well as the depth of unemployment and stagnation that was characteristic of the Great Depression. The Austrian explanation of the Hoover-Roosevelt Depression is historically accurate.
Just as in the 1930s, recovery from the Great Recession has been hampered by harmful government interventions, monetary and fiscal actions that impede market liquidation and reallocation of resources, and polices and rhetoric that generate regime uncertainty.[1] Explanations which make this case, based on similar Austrian microeconomic foundations should be given strong consideration. Such explanations best reflect actual cause and effect, and thus are better guides to the appropriate policy responses to the crisis and necessary monetary reform needed to prevent renewed occurrences of harmful boom-bust cycles. …..To Read More….
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