Great Depression

The Keynesian explanation

In an article written during the course of the depression, but before the banking crisis, John Maynard Keynes firmly attributed it to lack of investment brought about by high interest rates, tight Federal Reserve monetary policies, and diminishing returns to investment. (The fall in investment rather than consumption is very apparent in the expenditure statistics). He considered the stock market crash to have been a secondary factor, but one that had "greatly aqggravated" matters.