Depressions, Monetary Policy, and Economic Cycles

Unemployment and Monetary Policy: Government as Generator of the "Business Cycle," by Friedrich A. Hayek (Washington, D.C.: Cato Institute, 1979). Shows how state control of the monetary system can send misleading signals to economic agents, leading to misallocation of resources and corrective economic cycles. Includes his Nobel Prize acceptance speech,"The Pretence of Knowledge."

Banking and the Business Cycle: A Study of the Great Depression in the United States, by C. A. Phillips, T. F. McManus, and R. W. Nelson (1937; New York: Arno Press, 1972). This careful study of the causes of the Great Depression shows how monetary mismanagement led to economic disruption.

A Monetary History of the United States, 1867-1960, by Milton Friedman and Anna J. Schwartz (Princeton: Princeton University Press, 1963). A classic work of economic history, including a look at the relationship between monetary policy and economic cycles.

The Myth of the Great Depression, 1873-1896, by S. B. Saul (2d ed., London: Macmillan, 1985). Shows that the downward trend in prices of the last quarter of the nineteenth century in England did not constitute a "depresion." International competition and increased production led to many business failures and economic readjustment; such dynamic change should be distinguished from economic cycles or depressions.

The Economics of Inflation: A Study of Currency Depreciation in Post-War Germany, by Costantino Bresciani-Turroni (1937; reprint, Clifton, N.J.: Augustus M. Kelley, 1968). Shows the devastating effects of state money-creation.

Free Banking in Britain: Theory, Experience, and Debate, 1800-1845, by Lawrence H. White (New York: Cambridge University Press, 1984). White examines the Scottish experience with free, unregulated banking and money issue, showing it to have been more stable and efficient than central banking dominated by the state.

The Theory of Free Banking: Money Supply Under Competitive Note Issue, by George A. Selgin (Totowa, N.J.: Rowman and Littlefield, 1988). A major advance in monetary theory, Selgin's book shows how a free market monetary system operates. Offers a program for a stable monetary system without economic cycles.

America's Great Depression, by Murray Rothbard (1963; reprint, Los Angeles: Nash Publishing, 1972). Explains the Great Depression as the result of governmental manipulation of the supply of money and credit; also shows how the New Deal prolonged the depression.

"Herbert Hoover and the Myth of Laissez-Faire," by Murray Rothbard, in Ronald Radosh and Murray Rothbard, eds., A New History of Leviathan (New York: E. P. Dutton, 1972). A corrective to the view of Herbert Hoover as a "free marketeer." Hoover was an avid statist whose policies prefigured those of Roosevelt.

"The New Deal, National Socialism, and the Great Depression" by John A. Garrity in American Historical Review 78 (October 1973). Points out the striking similarities between the American New Deal and European fascist economic policies.

Out of Work: Unemployment and Government in Twentieth Century America, by Richard K. Vedder and Lowell E. Gallaway (New York: Holmes and Meier, 1993). This important historical study, which was written from a highly informed "Austrian" perspective, shows how governmental interventions into labor markets (both "microeconomic" and "macroeconomic") have created unemployment.

The Rationale of Central Banking, by Vera Smith (1936; Indianapolis: Liberty Press, 1990). A classic critique of the arguments for centralized state banking.

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