TY  - JOUR
AU  - Bernanke,Ben S.
TI  - Non-Monetary Effects of the Financial Crisis in the Propagation of the Great Depression
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1054
PY  - 1983
Y2  - 1983
UR  - http://www.nber.org/papers/w1054
L1  - http://www.nber.org/papers/w1054.pdf
N1  - Author contact info:
Ben S. Bernanke
E-Mail: Rita.C.Proctor@frb.gov
AB  - This paper examines the effects of the financial crisis of the 1930s onthe path of aggregate output during that period. Our approach is complementary to that of Friedman and Schwartz, who emphasized the monetary impact of the bank failures; we focus on non-monetary (primarily credit-related) aspects of the financial sector--output link and consider the problems of debtors as well as those of the banking system. We argue that the financial disruptions of 1930-33 reduced the efficiency of the credit allocation process; and that the resulting higher cost and reduced availability of credit acted to depress aggregate demand. Evidence suggests that effects of this type can help explain the unusual length and depth of the Great Depression.
ER  -