It was remarked at the outset of this paper that, in the 1920s,there existed a vigorous, diverse, and distinctly American literature dealing with monetary economics and the business cycle.

In this paper, I shall discuss in turn: the views of Hawtrey and Friedman on the powers of monetary and fiscal policy, and contrast them with those of Douglas and Director to which Tavlas draws attention; the role of monetary factors in causing and exacerbating the Great Contraction of...