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MARK W. HENDRICKSON: THREE NEGLECTED ECONOMIC LESSONS FROM AMERICAN HISTORY |
More money is not the cure for depressions, as can be seen by contrasting the depression of 1920-21 with the early 1930s. The money supply contracted to a comparable degree both times, but in the ‘20s prices and wages were more flexible (that is, free of government intervention), so that they could adjust and bring supply and demand into balance. In short, markets work if government stays out of the way.
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