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1920-21 and the Great Depression

Put differently: the 1920-21 episode was, in fact, a severe, though not particularly long, recession. Allowing the money supply to fall isn’t painless. Allowing the money supply to fall in an environment of severe downward wage rigidity is VERY “not painless.” The 1920-21 episode doesn’t demonstrate that deflation is harmless. It DOES demonstrate that if…

1920-21 and the Great Depression
The Austrian Economists Blog
by Steven Horwitz

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