Ben Bernanke's Fed

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Depression Obsession

How the Great Depression InformsBernanke’s Thinking

Modern central banking is defined by the two big policy mistakes of the last century: the Great Depression of the 1930s, and the Great Inflation of the 1970s.¹ While Bernanke’s views have been molded by both events, his academic research shows a particular interest in the Great Depression. In his book on the Depression, he wrote, “I guess I am a Great Depression buff, the way some people are Civil War buffs.”²

Data from the 1930s underscores why Bernanke views the Depression as such a crucial event in economic history. From 1929 to 1933 the level of U.S. GDP collapsed, ...