This is a collection of Ben Bernanke's essays on why the Great Depression was so devastating and lasted so long. The essays also show that while the it was an unparalleled disaster on a universal scale, some economies pulled up faster than others, and some made an opportunity out of a disaster.

Preface vii PART ONE: OVERVIEW 3 1. The Macroeconomics of the Great Depression: A Comparative Approach 5 PART TWO: MONEY AND FINANCIAL MARKETS 39 2. Nonmonetary Effects of the Financial Crisis in the Propagation of the Great Depression 41 3. The Gold Standard, Deflation, and Financial Crisis in the Great Depression: An International Comparison - With Harold James 70 4. Deflation and Monetary Contraction in the Great Depressim An Analysis by Simple Ratios - With Ilian Mihov 108 PART THREE: LABOR MARKETS 161 5. The Cyclical Behavior of Industrial Labor Markets: A Comparison of the Prewar and Postwar Eras - With James L. Powell 163 6. Employment, Hours, and Earnings in the Depression: An Analysis of Eight Manufacturing Industries 206 7. Unemployment, Inflation, and Wages in the American Depression: Are There Lessons for Europe? - With Martin Parkinson 247 8. Procyclical Labor Productivity and Competing Theories of the Business Cycle: Some Evidence from Interwar U.S. Manufacturing Industries - With Martin Parkinson 255 9. Nominal Wage Stickiness and Aggregate Supply in the Great Depression - With Kevin Carey 276 Index 303

"[H]aving devoted much of his career to studying the causes of the Great Depression, Bernanke was the academic expert on how to prevent financial crises from spinning out of control and threatening the general economy. One line from his Essays on the Great Depression sounds especially prescient today: 'To the extent that bank panics interfere with normal flows of credit, they may affect the performance of the real economy.'"--Roger Lowenstein, New York Times Magazine "Bernanke is the master of applied microeconomics. Not only is he technically proficient but his ability to place his results in a larger macroeconomic context is unparalleled."--Mark Toma, Financial History Review "Mr. Bernanke certainly knows the importance of well-functioning markets. In Essays on the Great Depression he wrote persuasively that runs on the banks and extensive defaults on loans reduced the efficiency of the financial sector, prevented it from doing its normal job in allocating resources, and contributed to the Depression severity. The Depression-era problems he studied are mirrored by similar issues today, and they need urgent attention."--Robert J. Shiller, New York Times "Fortunately, before he became entangled in these restrictions [Bernanke] did edit and help write a book, Essays on the Great Depression... Mr. Bernanke's motive was that understanding the depression would provide important clues to what can go wrong with capitalist market systems."--Samuel Brittan, Financial Times "The financial crisis has made Federal Reserve Chairman Ben Bernanke's book Essays on the Great Depression a hot seller... Bernanke, a former Princeton University economist, is considered the pre-eminent living scholar of the Great Depression. He is practicing today what he preached in his book: Flood the system with money to avoid a depression."--Dennis Cauchon, USA Today "When Ben Bernanke arrived at the Federal Reserve in February 2006 as the new chairman of the central bank, he had a copy of his 2001 book, Inflation Targeting: Lessons from the International Experience, tucked under his arm. Not literally, of course. He was hoping to convince his colleagues on the Federal Open Market Committee of the value of an explicit inflation target. Little did he know that less than two years later he'd be shelving Inflation Targeting and turning to Essays on the Great Depression, another of his books, for guidance. In his book of essays, Bernanke calls the Great Depression the 'Holy Grail of macroeconomics.' He writes that 'the experience of the 1930s continues to influence macroeconomists' beliefs, policy recommendations, and research agendas.'"--Caroline Baum, Bloomberg.com "With some observers saying that the ongoing financial crisis could be the worst since the Great Depression, the greatest living expert on that period is getting the chance to apply its economic lessons... In Essays on the Great Depression ... [Bernanke] notes that understanding that period is the 'holy grail of macroeconomics.'"--Spencer Jakab, Dow Jones Newswires

"This influential body of work is a significant contribution to our understanding the depth and persistence of the Great Depression. . . . This book will become a standard reference in the field of business cycle research."—Randall Kroszner, University of Chicago"Bernanke's work has had a powerful impact on the economics profession, alerting macroeconomists to the advantages of historical analysis, and a number of important figures (James Hamilton, Steve Cecchetti, for example), inspired by his work, have followed him into the field. The nine essays form a remarkably coherent whole."—Barry Eichengreen, University of California, Berkeley, and author of Globalizing Capital: A History of the International Monetary System"Collecting these essays together will provide a single source for students to find Bernanke's substantial contributions. . . . His papers demonstrate conclusively that the international view of the great depression has impressive explanatory power."—Peter Temin, Massachusetts Institute of Technology

This influential body of work is a significant contribution to our understanding the depth and persistence of the Great Depression... This book will become a standard reference in the field of business cycle research. -- Randall Kroszner, University of Chicago Bernanke's work has had a powerful impact on the economics profession, alerting macroeconomists to the advantages of historical analysis, and a number of important figures (James Hamilton, Steve Cecchetti, for example), inspired by his work, have followed him into the field. The nine essays form a remarkably coherent whole. -- Barry Eichengreen, University of California, Berkeley, and author of "Globalizing Capital: A History of the International Monetary System" Collecting these essays together will provide a single source for students to find Bernanke's substantial contributions... His papers demonstrate conclusively that the international view of the great depression has impressive explanatory power. -- Peter Temin, Massachusetts Institute of Technology