Lesson unlearned

By Henry CK Liu

October 29, 2009, is the 80th anniversary of the market crash in the United States that led to the Great Depression. Did the world learn the lesson of 1929?

Milton Friedman identified through exhaustive analysis of historical data the potential role of monetary policy in shaping the course of inflation and business cycles, with the counterfactual conclusion that the Great Depression of the 1930s could have been avoided with appropriate Federal Reserve monetary easing to counteract destructive market forces.