Comment and Discussion

摘要

Why did monetary policymakers fail to stem the Great Depression of the 1930s? A conventional view, largely due to Barry Eichengreen and Jeffrey Sachs (1986) and Ben Bernanke (2004), holds that the gold standard was key. Adherence to the gold standard forced economies experiencing capital outflows to contract and was the key mechanism by which deflation was spread throughout the world. The link to gold also prevented central banks from acting as the lender of last resort when faced with a financial panic, and it placed constraints on fiscal authorities who might otherwise have engaged in expansionary spending or tax policies. A key stylized fact that supports this interpretation is that among the industrialized countries, the depth and length of the depression were correlated with how long a country stayed on the gold standard. The downturn was more muted in countries, such as the United Kingdom, that were among the first to exit the gold standard, and longer in countries, such as France, that were among the last.