IESET.
Hypotheses·monetary·friedman_schwartz_great_depression_monetary_cause

The Fed's 1929–1933 contraction of M2 by approximately one-third was the proximate cause of the Great Depression's severity, not a Keynesian demand-collapse failure.

SUPPORTEDengine/runs/friedman_schwartz_great_depression_monetary_cause

SUPPORTED - JST money, nominal GDP, and real GDP all clear the 1929-1933 contraction gates

confidence cueThis is a clear pass for the claim as written. It still applies only to this sample, period, and method.

policy briefNeeds review

In ordinary language

In plain terms, this asks whether m2 money stock is actually linked to better or worse real income from 1925 to 1939.

plain answer

The data clearly moved in the predicted direction. JST money, nominal GDP, and real GDP all clear the 1929-1933 contraction gates

why it matters

This matters because monetary claims should change belief only when they survive a pre-declared empirical test.

how the test works

It compares 1 country or place units from 1925 to 1939, using a descriptive design.

what was measured
What changed
  • M2 money stock
  • Monetary base
What we checked
  • Real income
  • Cpi level
  • Industrial production
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

0 input datasets, 0 unresolved missing series, provenance status: no input vintages recorded.

Results

engine/runs/friedman_schwartz_great_depression_monetary_cause
1007550250192519321939USA
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show real_gdp across 1 sampled countries over 1925–1939.
The shapes above are stylised — none of the lines are real data.
Placeholder for friedman_schwartz_great_depression_monetary_cause. Published chart will be generated from engine/runs/friedman_schwartz_great_depression_monetary_cause/chart_data.json.

Who has skin in the game — schools predicting on this

1 school list this hypothesis as a test of their position. The chips below are school-level scoreboard outcomes, not a second hypothesis verdict.

hypothesis verdict vs scoreboard outcome

The banner verdict judges this hypothesis as written. The scoreboard asks whether each school's polarity-corrected prediction was right. Raw status is not a school win: SUPPORTED supports schools that needed SUPPORTED, but refutes schools that needed REFUTED.

Chicago School Monetarismwins if SUPPORTEDschool supported

Pre-registration

pre-registered
first-spec commit bae09ab · 2026-04-29T22:09:42Z
run generated · 2026-05-17T18:10:06Z

The Fed's 1929–1933 contraction of M2 by approximately one-third was the proximate cause of the Great Depression's severity, not a Keynesian demand-collapse failure.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

SUPPORTED if the local JST macrohistory panel shows a 1929-1933 US money-stock contraction of at least 25 log percentage points, a nominal-GDP contraction of at least 25%, and a real-GDP contraction of at least 20%. REFUTED if the money stock contracts by less than 10 log percentage points or nominal GDP does not contract by at least 10%. PARTIAL otherwise.

formal test & threshold
test:      Descriptive narrative reconstruction of US 1929-33 M2/output/CPI co-movement with NBER+Friedman-Schwartz series; M2 contraction precedes >25% nominal-output decline by 6-18 months supports causal sequence.

Method

Template
descriptive
Clustering
episode
Sample
1 countries · 1925 – 1939
Evidence type
associational

Exact local-data wrapper uses JST macrohistory annual USA columns (`money`, `gdp`, `rgdpmad`, `cpi`) because the generic descriptive runner otherwise chooses the wrong value column from wide JST parquet files. Pattern-test: 1929-1933 money contraction alongside nominal-output, real-output, and price-level collapse.

Data

VariableSourceTransform
real_gdp
outcome
fred:GDPCAtier 1
jst:real_gdptier 3
log_level
cpi_level
outcome
fred:CPIAUCNStier 1
jst:cpitier 3
log_level
industrial_production
outcome
jst:industrial_productiontier 3
fred:M1204AUSM363SNBRtier 1
log_level
m2_money_stock
treatment
jst:moneytier 3
fred:M14Mtier 1
log_level
monetary_base
treatment
fred:AMBNStier 1
log_level
discount_rate_nyfed
control
fred:M13009USM156NNBRtier 1
level
bank_failure_count
control
academic:friedman_schwartz_monetary_history_appendixtier 4
log_level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card - friedman_schwartz_great_depression_monetary_cause

Verdict: SUPPORTED - JST money, nominal GDP, and real GDP all clear the 1929-1933 contraction gates

Exact JST Great Depression Gates

  • money_pct_change_1929_1933: -24.783
  • money_log_ppt_change_1929_1933: -28.479
  • nominal_gdp_pct_change_1929_1933: -45.336
  • real_gdp_pct_change_1929_1933: -30.757
  • cpi_pct_change_1929_1933: -23.977
  • unemployment_pp_change_1929_1933: 21.700

Interpretation

The local JST macrohistory panel shows the money stock falling with the output and price-level collapse between 1929 and 1933. This validates the monetary-contraction timing/magnitude gate, while leaving causality and banking-panic mechanisms as interpretive caveats.

Generated by engine/runs/friedman_schwartz_great_depression_monetary_cause/replication.py at 2026-05-17T18:10:06+00:00

Notes

Origin is auto-generated coverage-gap stub seeded from Chicago-monetarist Friedman-Schwartz reading of 1929-33 as Fed-induced. Human review required before promotion to candidate.

Authored framework. Read the transparency note.