Economics, Econometrics and Finance
8 years ago

1920-21 Depression Debunks Austerity Myth, Challenges Modern Economic Policies

Cambridge Journal of Economics
A note on America's 1920-21 depression as an argument for austerity
David Kuehn

Paper Summary

The 1920-21 depression in the USA is not a good example of austerity working. Austerity measures were put in place before the depression started to get better. The depression was caused by supply issues, not a lack of demand. This means it's not a good test of Keynesian fiscal policy.

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