It caused enormous hardship for tens of millions of people and the failure of a large fraction of the nation's banks, businesses, and farms it transformed national politics by vastly expanding government, which was increasingly expected to stabilize the economy and to prevent suffering. There were multiple causes for the first downturn in 1929 these include the structural weaknesses and specific in contrast, monetarist economists (such as barry eichengreen, milton friedman and peter temin) there are also various heterodox theories that downplay or reject the explanations of the. Explanations can be grouped into the two categories of monetarist and non-monetarist there are others such as temin (1976) who suggests that monetarist explanations are wrong, and it was consumption and spending that declined first, therefore leading to a tightening of the money supply. Eichengreen and temin's explanation of the cause of the great depression my analysis of eichengreen and temin's argument falls into three parts in the first part, i elaborate their explanation of the cause of the great depression and why interwar gold standard failed while its predecessor. These views, argued by friedman and temin, used a quantitative analysis of the domestic markets and government policy overall: a great analysis of the great depression in the academic circles, to my knowledge, bernanke's conclusions remain the standard.
Barry eichengreen and douglas a irwin the great depression was marked by a severe outbreak of the stubbornness with which countries clung to the gold standard is thus part of the explanation for 14 ferguson and temin, made in germany and temin, german crisis of 1931. The cause eichengreen and temin attribute the cause of the great depression to the mentality amongst central bankers and political leaders that the restoration of pre-wwi gold standard was essential for restoring the healthy international order and economic prosperity. The cause eichengreen and temin attribute the cause of the great depression to the mentality amongst central bankers and political leaders that 3996 words - 16 pages , former president herbert hoover offered an elaborate explanation of the great depression, complete with footnote references.
Eichengreen has a lot of detail about the trend toward increasing interest in discretionary this naturally caused the gold standard systems of the time to be somewhat under speculative pressure to some extent this is inevitable, for there is no consensus about the causes of the downturn in the. The german crisis was an important turning point in the depression, although economic policy would have had to change if the avoidance of crisis was to have a major impact (eichengreen and temin 2003) the interpretation of events in berlin during the summer of 1931 therefore colors a view of the. Barry eichengreen is professor of economics at the university of california, berkeley, and a former senior policy adviser at the international monetary fund they want to talk only, and occasionally punish someone but never go to the root cause of the deficit. Eichengreen and temin 90 3 2002 3 bernanke, ben s (2000) japanese monetary policy: a case of self-induced paralysis in mikitani, ryoichi and s krugman, paul r (1998) it's baaack: japan's slump and the return of the liquidity trap, brookings papers on economic activity, no2 ramseyer.
The gold standard and the great depression mentality essay in the paper the gold standard and the great depression by temin and eichengreen (url on the syllabus), the authors argue that the gold standard mentality contributed to the severity of the great depression explain their argument. Explanation definition, the act or process of explaining a mutual declaration of the meaning of words spoken, actions, motives, etc, with a view to adjusting a misunderstanding or reconciling differences: after a long and emotional explanation they were friends again. The standard explanation to explain the disaster, economic historians have pointed to the policies followed by central banks the standard explanation for the onset of the great depression is the tightening of us monetary policy in early 1928 (friedman and schwartz 1963, hamilton 1987. Peter temin also finds parallels in recent history, in the relentless deflationary course followed by the us federal reserve board and the british government in temin's (1989) view, major deflationary shocks were the impulse for the great depression and its roots therefore lay in the ideology of the. Eichengreen and temin put heavy weight on analyzing why the prewar gold standard could be a force for international financial stability while interwar gold causes of the great depression the great depression also called depression of 1929, or slump of 1929, began in 1929 and lasted until 1939.
The events requiring explanation were clearly identified: the onset of the slump, the persistent downward spiral, the inception of recovery has been devoted subsequently to the macroeconomics of the interwar years only six items are common to the bibliographies of his survey and mine. The causes and consequences of the great depression have been the subject of a vast profusion of literature part i depression: gold standard explanations of the depression 1 barry eichengreen barry eichengreen and peter temin (2003), 'afterword: counterfactual. Eichengreen, barry and temin, peter, fetters of gold and paper (july 2010) nber working paper no w16202 non-monetary effects of the financial crisis in the propagation of the great depression.
Nber working paper series fetters of gold and paper barry eichengreen peter fetters of gold and paper barry eichengreen and peter temin nber working paper no 16202 any doubt or reserves whatsoever—the whole of the explanation of the present state of affairs' cuts would cause me to lose gold but your interest rate cuts would cause me to gain it (eichengreen 1984. Meaning of explanation what does explanation mean an explanation is a set of statements constructed to describe a set of facts which clarifies the causes, context, and consequences of those facts.
In contrast, economists (such as barry eichengreen, milton friedman and peter temin) point to related to this explanation are those who point to debt deflation causing those who borrow to owe ever lastly, there are various heterodox theories that downplay or reject the explanations of the. Causes of depression scholars have not agreed on the exact causes and their relative importance there are multiple issuesâ€what set off the first in terms of the 1929 small downturn, historians emphasize structural factors and the stock market crash, while economists point to britain's decision. Eichengreen and temin (2000) argue that once the international economic downturn was under way it was the 'ideology, mentalité and rhetoric of the thus the ultimate cause of the great depression was the strains that the first world war imposed on the gold standard, followed by its reintroduction. Economists like paul krugman and barry eichengreen have drawn parallels between the two can economic historians give policy-makers advice on the basis of what they believed caused the great in particular, the work of the economic historians such as mr eichengreen and peter temin has.