The Role of Bank Failures & Panics: The Great Depression

In this video on the Great Depression, expert David Wheelock of the St. Louis Fed explains the relationship between bank failures and the collapse of the money supply. He also describes how a declining money supply influences employment, inflation/deflation and economic output. "That is the monetary explanation for the Great Depression. Bank failures, bank runs cause a contraction of the money supply; causes a decline in spending, investing and GDP."

David Wheelock discusses the Great Depression as part of an economic education workshop at the St. Louis Fed. This is Part 6 of that presentation. Recorded July 11, 2013.

Tools for Teaching about the Great Depression

Discover Great Depression activities and lesson plans.

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