January 5, 2014 at 11:33 pm #18180
I read the chapter and while interesting Im not sure it answers my question. The theory I just learned (Perry Mehrling’s online class: https://class.coursera.org/money2-001/lecture/61) states that as more countries went on the gold standard after WWI, demand for gold increased dramatically. These pressures were deflationary and Rather than revaluing, the US kept the price parity causing prices to fall. Additionally their rate hikes in 1931 caused massive gold inflows causing other countries to go off the GS, thus collapsing the GS system. These two factors caused the Great Depression according to the theory. Do Austrians agree with this?