Addresses the central economic event of the century, the Great Depression. This book argues that the Federal Reserve could have stemmed the severity of the Depression, but failed to exercise its role of managing the monetary system and ameliorating banking panics.

"The leading and most persuasive explanation of the worst economic disaster in American history, the onset of the Great Depression."—Ben S. Bernanke, Nobel Prize–winning economist and former chair of the U.S. Federal Reserve Nobel Prize–winning economist Milton Friedman and his celebrated colleague Anna Jacobson Schwartz’s landmark reinterpretation of the Great Depression Milton Friedman and Anna Jacobson Schwartz’s A Monetary History of the United States, 1867–1960 is one of the most influential economics books of the twentieth century. A landmark achievement, it marshaled massive historical data and sharp analytics to argue that monetary policy—steady control of the money supply—matters profoundly in the management of the nation’s economy, especially in navigating serious economic fluctuations. Perhaps no other chapter of this monumental book had a greater impact than "The Great Contraction, 1929–33," which offered a fundamental reinterpretation of the central economic event of the twentieth century—the Great Depression. The Great Contraction, 1929–1933 presents that chapter, which runs to more than 200 pages, as a stand-alone book, in an edition that also features a new preface by Anna Jacobson Schwartz and a new introduction by the economist Peter Bernstein, both of which place the work and its lasting impact in context. In addition, the book includes a speech by Nobel Prize–winning economist and former chair of the Federal Reserve Ben Bernanke, in which he reflects on the continuing importance of Friedman and Schwartz’s work.