The first monetary theory of the Great Depression is often credited to Milton Friedman. Advanced to counter the idea that the Great Depression resulted from inherent capitalistic instabilities, Friedman's theory attributed the Depression to policy mistakes by an inept Federal Reserve Board. More...

This chapter suggests that a model of a costlessly produced, competitively supplied, convertible money is compatible with a macroeconomic model with a determinate price level, a classical dichotomy between the real and monetary sectors, in which Say's Law (Identity) is valid, the latter being...