Hayek, Cassel, and the Origins of the Great Depression

32 Pages Posted: 29 Jan 2021

See all articles by Thomas L. Hogan

Thomas L. Hogan

American Institute for Economic Research

Lawrence H. White

George Mason University - Department of Economics; George Mason University - Mercatus Center

Multiple version iconThere are 2 versions of this paper

Date Written: December 9, 2020

Abstract

We revisit the origins of the Great Depression by contrasting the accounts of two contemporary economists, Friedrich A. Hayek and Gustav Cassel. Their distinct theories highlight important, but often unacknowledged, differences between the international depression and the Great Depression in the United States. Hayek’s business cycle theory offered a monetary overexpansion account for the 1920s investment boom, the collapse of which initiated the Great Depression in the United States. Cassel’s warnings about a scarcity gold reserves related to the international character of the downturn, but the mechanisms he emphasized contributed little to the deflation or depression in the United States.

Keywords: Great Depression, Gustav Cassel, F. A. Hayek, Gold standard Federal Reserve

JEL Classification: B22, B31, E31, E32, E42, E58

Suggested Citation

Hogan, Thomas L. and White, Lawrence H., Hayek, Cassel, and the Origins of the Great Depression (December 9, 2020). Journal of Economic Behavior and Organization, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3745980

Thomas L. Hogan (Contact Author)

American Institute for Economic Research ( email )

PO Box 1000
Great Barrington, MA 01230
United States

Lawrence H. White

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

George Mason University - Mercatus Center ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States

HOME PAGE: http://ppe.mercatus.org/scholars/lawrence-h-white

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