The Cause of the Great Depression
The Decision to Resume the Gold Standard on Prewar Terms
By Sandeep Mazumder, John H. Wood
The cause of the Great Depression was the post-World War I decision to resume the gold standard on prewar terms, after immense inflation during the war. No collection of smaller shocks, such as bank failures and demand declines was required, as the deflationary effects of full-resumption policies is sufficient to explain the Depression by itself.
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