The Federal Reserve's response to the Great Depression was controversial from "summary" of A Monetary History of the United States, 1867-1960 by Milton Friedman,Anna Jacobson Schwartz
The response of the Federal Reserve to the Great Depression elicited a significant amount of controversy and debate among economists and policymakers alike. Friedman and Schwartz argue that the Federal Reserve's actions, or lack thereof, played a crucial role in exacerbating the severity of the economic downturn. They contend that the central bank's failure to act decisively and provide sufficient liquidity to the financial system led to a contraction in the money supply, which in turn deepened the deflationary spiral gripping the economy. The authors point to the Federal Reserve's adherence to the gold standard as a key factor in its reluctance to expand the money supply during...
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