EconAir

Famous Headline INTRODUCTION Before reading this essay, I strongly recommend you see the PBS video on YouTube. Type in Stock Market Crash 1929. Look for US – The Crash of 1929 (PBS), ALLHISTORIES – PLAYLIST.  Documentary  broken into 6 parts to show commercials. Or purchase video on Amazon. Great documentary with wonderful photos, videos, and scenes from movies of the 1920s and the crash. Shows what a crazy time it was and how some of the manic behavior of the 1920s contributed to the stock market bubble.    I also recommend you read Frederick Lewis Allen,  Only Yesterday; An Informal History of the 1920’s . This a wonderful popular history on the 1920s and the crash. It shows how the economic, social, and psychological changes in the 1920s contributed to the speculative frenzy in the stock market. The author lived through it all. You can skip some of the chapters the first time through; for example, skip Chapters III, VI, IX, And X.   DEFINITIONS The ...

    INTRODUCTION   Even after 97 years since the start of the Great Depression, there remains controversy about the causes. It is possible to draw up a list of probable causes but there is no consensus about the relative importance or the interaction of the causal variables.   GENERAL APPROACH   The basic approach of modern macroeconomic theory is to view a national economy as a relatively stable, self-equilibrating mechanism that is capable of sustained economic growth over a long period. Recessions and inflationary periods occur because of some kind of “external shock” to the system that impacts components of aggregate demand or aggregate supply. In this model, external shocks (exogenous variables) include the sudden and large increase in the cost of vital inputs such as oil, sudden and large changes in competition from imports or fall in the demand for exports, unexpected changes in nominal interest rates, monetary policy by the Fed, and fiscal policy (govern...