President George W. Bush famously remarked in July 2008 that during the housing boom “Wall Street got drunk... and now it has a hangover.” It was the Federal Reserve that spiked the punchbowl. The Fed sowed the seeds for the bust of 2007-08 by overexpanding credit, keeping interest rates too...

We revisit the origins of the Great Depression by contrasting the accounts of two contemporary economists, Friedrich A. Hayek and Gustav Cassel. Their distinct theories highlight important, but often unacknowledged, differences between the international depression and the Great Depression in the...

The business cycle theory of Friedrich A. Hayek offers an explanation for the onset of the Great Depression that is more complete than those of his contemporaries, including Gustav Cassel. Hayek sought to explain why the boom of the 1920s ended in the bust of 1929. In the 1930s, Hayek's theory...