The book contends that had the Fed maintained a steady money supply, the severe contraction could have been avoided or significantly mitigated. Key Historical Episodes Analyzed The book covers several distinct monetary eras:
They identified four critical errors, including raising interest rates in 1931 to defend the gold standard and failing to act as a "lender of last resort" to stop banking panics.
Before this book, the prevailing Keynesian consensus held that monetary policy was largely ineffective, especially during deep downturns. Friedman and Schwartz challenged this by demonstrating that: A Monetary History of the United States, 1867-1960
The transition from private clearinghouses to a centralized monetary authority.
The authors argued that the Depression was not a "market failure" but a "government failure." They blamed the Federal Reserve for allowing the money supply to shrink by one-third between 1929 and 1933. The book contends that had the Fed maintained
Today, the book is available in various formats, with Paperback editions and eBooks typically priced between $50 and $75.
Populist efforts for bimetallism and the deflationary pressures of the late 19th century. Friedman and Schwartz challenged this by demonstrating that:
The inflationary impact of wartime financing and the eventual revival of independent monetary policy in the 1950s. Intellectual Legacy