This paper estimates a series of shocks to hit the US economy during the Great Depression, using a New Keynesian model with unemployment and bargaining frictions. Shocks to long-run inflation expectations appear to account for much of the cyclical behavior of employment, while an increase in...

Why study business cycles? -- Describing business cycles -- Early business cycle theories -- Keynes' and Keynesian theory -- The monetarist model -- The rational expectations model -- Real business cycle models -- New Keynesian models -- Models of credit and financial instability --...

In 1936-37, the Federal Reserve doubled the reserve requirements imposed on member banks. Ever since, the question of whether the doubling of reserve requirements increased reserve demand and produced a contraction of money and credit, and thereby helped to cause the recession of 1937-1938, has...