The Depression of 1873-1879: An Austrian Perspective

The Quarterly Journal of Austrian Economics, 17(4):474-509

38 Pages Posted: 3 Nov 2014 Last revised: 25 Mar 2015

Date Written: February 12, 2015

Abstract

This paper analyzes the period 1867-79 in American economic history from an "Austrian" perspective. The post-Civil War boom, the Panic of 1873, and the subsequent downturn are investigated in light of Austrian Business Cycle Theory (ABCT) and its structure of production framework. This paper shows how recent legislation allowed for monetary inflation and a boom to develop that inevitably turned into a bust. However, since the federal government pursued a policy of relative laissez faire, the economy successfully recovered. Consequently, there was no prolonged depression in the 1870s.

Keywords: Panic of 1873, Austrian Business Cycle Theory, Depression of 1873-79, National Banking System

JEL Classification: E02, E03, E04, N01, N02

Suggested Citation

Newman, Patrick, The Depression of 1873-1879: An Austrian Perspective (February 12, 2015). The Quarterly Journal of Austrian Economics, 17(4):474-509, Available at SSRN: https://ssrn.com/abstract=2518225 or http://dx.doi.org/10.2139/ssrn.2518225

Patrick Newman (Contact Author)

Florida Southern College ( email )

Lakeland, FL 33801
United States

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