DID INTERNATIONAL ECONOMIC FORCES CAUSE THE GREAT DEPRESSION?

This paper reviews and assesses international explanations for the depth and duration of the Great Depression. Many of the conclusions are negative. The U.S. Smoot-Hawley Tariff Act of 1930 came too late to account for the 1929 downturn and fails to explain the severity of the contraction in the U.S. The competitive devaluations of the 1930s redistributed the Depression's effects across countries but did not worsen it overall. The deflationary consequences of the liquidation of foreign exchange reserves were minor. Domestic central bank policies and their failure to be coordinated internationally must bear the major responsibility for the Depression. Copyright 1988 Western Economic Association International.