Monetary policy and the Depression

Abstract

The economic mechanism is obviously out of gear, and it is an easy solution of the trouble to blame the lubricant. Before, however, arriving at a hasty conclusion, one should pause to consider whether it is not unreasonable to attack the monetary system that worked with apparent ease and success when trade was good. Did not the same monetary system, that is now the subject of such bitter complaint, amply suffice to support rising prices and advancing prosperity in earlier years? The lubricant is unchanged; why should it have ceased to work?