December, 2014

The Depression of 1873 - 1879

An Austrian Perspective
  • Patrick Newman

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This paper analyzes the period 1867 – 1879 in American economic history from an “Austrian” perspective. The post-Civil War boom, the Panel if 1873, and the subsequent downturn are investigated in light of Austrian Business Cycle Theory (ABCT) and its structure of production framework. This paper shows how recent legislation allowed for monetary inflation and a boom to develop that inevitably turned into a bust. However, since the federal government pursued a policy of relative laissez faire, the economy successfully recovered. Consequently, there was no prolonged depression in the 1870s.

Find the full paper here.