Late 19th and Early 20th Century United States Business Cycles and Monetary Policy




Newman, Patrick Thomas

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My dissertation deals with late 19th and early 20th century United States monetary and macroeconomic history. The three chapters are on the Depression of 1873-1879, the Depression of 1920-1921, and the Federal Reserve’s monetary policy in the 1920s. All three place a unique economic perspective on the various historical episodes and seek to engage the contemporary literature in innovative ways. In particular, the first two utilize Austrian Business Cycle Theory (ABCT) and argue that these depressions were the result of unsustainable booms. They also argue that the depressions ended due to market based natural recoveries and were aided, and not inhibited by, the prevailing laissez faire policies of the time. The third investigates a hotly debated topic among monetary historians about whether Federal Reserve monetary policy in the 1920s was expansionary or contractionary, an issue that has relevance for understanding the Great Depression. I argue that the Federal Reserve did in fact engage in expansionary monetary policy, although I leave for future research the particular business cycle implications of this.



Economic history, Austrian Economics, Business Cycles, Economic History