Temin Notes - Economics488 GREATDEPRESSION: Thearticle""...

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Economics 488 GREAT DEPRESSION: Notes on Temin’s article   The article, "Lessons for the Present from the Great Depression," is the text of a paper presented  by economic historian Peter Temin at the 1975 American Economic Association meetings. Thus  the "Present" in the title refers to the era of the mid-1970s, in particular, to the recession of  1973-75. Temin was involved in what might loosely be referred to as a debate between Keynesians  and monetarists over the causes of the Great Depression. You will remember from Econ 200 (or  perhaps 332) that Keynesianism as a school of thought in economics emerged in the 1930s after  Keynes published his new ideas on macroeconomic behavior that logically explained, in a way  that classical economics could not, the Great Depression. Thus, initially, Keynesians had a  monopoly on explanations of the Depression. In 1963, Milton Friedman and Anna Schwartz  published their Monetary History of the U.S.  It was in this book that an alternative, monetarist,  interpretation of the Depression was offered. Monetarists believe that money has an independent  causative role in the economy. They contend that a decrease in the money stock was the primary  cause of the Great Depression. Following the quantity theory of money, when the money supply  declines, people try to restore the relation between their money balances and their income by 
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This note was uploaded on 05/22/2011 for the course ECON 488 taught by Professor Brunton during the Spring '11 term at James Madison University.

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Temin Notes - Economics488 GREATDEPRESSION: Thearticle""...

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