Lecture 7 - US Depression

Lecture 7 - US Depression - US Depression (1929) 1....

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US Depression (1929) 1. Monetarists – Milton Friedman a. argued that the depression was due to monetary factors 2. Keynesians – used most of what John Maynard Keynes had to say about the economy to back up what they said a. used real factors to explain the depression - ¾ of the fall in demand between 1921 and 1931 was due to real factors; ¼ due to monetary factors - Debate is really between the first two years of the depression Real Factors 1. Construction Industry 2. Agriculture Industry 3. Income Distribution and reliance on credit Construction Industry - this industry is usually a leading indicator towards the direction that the economy is heading - this industry started to fall in 1925 - Population and the birth rate started to fall (1920’s); this was a delayed reaction to health factors from the war (more children started to survive so fewer people had children) - The US decreased the amount of people immigrating into the country - The US brought in tough restrictions for people who wanted to immigrate because of the new enforced labour laws Agriculture Industry - Sluggish demand for wheat
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This note was uploaded on 04/18/2008 for the course ECONOMICS ECN 220 taught by Professor Jolly during the Winter '08 term at Ryerson.

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Lecture 7 - US Depression - US Depression (1929) 1....

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