The Great Depression By Milton Freidman And Paul Samuelson

Introduction: Background Information The Great Depression is defined as an era of hardship and was the â€Å"economic downturn in the history of the Western industrialized world† . The United States was predominantly affected by the Great Depression, soon after stock market crash of October 1929. This fiscal crisis sent Wall Street, the center of economics in New York into a state of prolonged recession that affected foreign economies. In the next few years in America, unemployment increased immensely, consumer and investor spending decreased and by 1933, â€Å"the Great Depression had reached its nadir as some 13-15 million Americans were unemployed and nearly half of the country’s banks had collapsed.† Since its occurrence, The Great Depression has sparked debates among economists and perhaps the most accurately represented are from a television debate in 1969. Two economists, Milton Freidman and Paul Samuelson presented their positions on the Depression. Friedman, believed it â€Å"had a single cause: errors in carrying out monetary policy in the United States.† Samuelson argued â€Å"it was the result of a series of historical accidents.† These opinions are quite famous when referring to this topic, but many economists, such as Mr. Charles Kindleberger, believes there are more factors that should be taken into consideration. Part A: Identification of the Thesis The World in Depression 1929-1939 provides further insight on the Great Depression and the fundamental inquiry thatShow MoreRelatedThe Relationship Between Inflation And Unemployment1662 Words   |  7 Pagestends to be high, and when unemployment is high, the inflation rate tends to be low, even to be negative. Two years later, economists Paul Samuelson and Robert Solow, who adhere to the Keynesian school of economics, also published an article, showing the same negative correlation between inflation and unemployment, based on the United States’ economic data (Samuelson and Solow 1960). Additionally, they also gave an explanation of such a relationship by using the aggregate demand and aggregate supply