The authors test the hypothesis that the Great Contraction would have been attenuated had the Federal Reserve not allowed the money stock to decline. They simulate a model that estimates separate relations for output and the price level and assumes that output and price dynamics are not...

The authors study common features in the income velocity of money, income, and interest rates for Canada, the United States, the United Kingdom, Sweden, and Norway using annual data from 1870. The recently developed and refined techniques of testing for cointegration are employed. The evidence...