Discussion of the Great Depression is back in the news, and it has prompted a couple of posts at marginalrevolution.com by Alex Tabarrok. I thought the second was clever. Tabarrok notes the neo-Keynesians argue that fiscal policy was at best only mildly expansionary during Roosevelt's first two terms because higher taxes largely counteracted the effects of increased government spending. Tabarrok suggests that if we take into account the supply-side and the uncertainty effects of changing tax policy, the net effect of New Deal policy would have been contractionary. The view that the bulk of the New Deal did little to get the economy out of Depression and may have actually prolonged it is not a popular view on the Left.
Update: Here is another post at marginalrevolution.com about the Great Depression.
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