An historical decomposition of the great depression to determine the role of money

The innovation-accounting technique of historical decomposition seems ideally suited as a vehicle for a re-examination of money's role during the Depression. Its application, using U.S. monthly data for 1919 to 1941, reveals that innovations in money exerted a considerable influence on prices and output after October 1929, although the depth of the Depression and the extent of the subsequent recovery cannot be attributed solely to monetary …