73 min listen
Rustici on Smoot-Hawley and the Great Depression
Rustici on Smoot-Hawley and the Great Depression
ratings:
Length:
85 minutes
Released:
Jan 4, 2010
Format:
Podcast episode
Description
Thomas Rustici of George Mason University and author of Lessons from the Great Depression talks with EconTalk host Russ Roberts about the impact of the Smoot-Hawley Act on the economy. The standard view is that the decrease in trade that followed Smoot-Hawley was not big enough to be a significant contributor to the Great Depression. Rustici argues that this Keynesian approach that looks at aggregate spending misses a crucial mechanism for understanding the impact of Smoot-Hawley. Rustici focuses on the impact of Smoot Hawley on bank closings and the money supply. Smoot-Hawley launched an international trade war that reduced world trade dramatically. This had large concentrated regional effects in the United States and around the world in areas that depended on trade. Those were the areas where the first banks collapsed, contracting the money supply via the fractional reserve banking system. Rustici argues that the Keynesian indictment of the price system ignores the policy failures that destroyed the institutions that make the price system work.
Released:
Jan 4, 2010
Format:
Podcast episode
Titles in the series (52)
Munger on Many Things: Mike Munger talks with host Russ Roberts about many things. Listeners sent in questions for Mike and Russ to talk about. They chose ten of the most interesting questions with the idea of talking about each for six minutes. The topics are the scarcity of clean water, asset bubbles, the role of Fannie and Freddie in the financial crisis, can a business pass a tax on to its customers (or maybe even its workers), compassionate food, the study of economics, how to choose a college, the nature of cooperation in a modern economy, the humanity of non-profits, and the American Dream. by EconTalk Archives, 2010