Monetary History of the United States, 1867-1960

"Milton Friedman and Anna Jacobson Schwartz’s A Monetary History of the United States, 1867–1960 is a magisterial work with a direct and indirect influence that would be difficult to overstate," said Ben S. Bernanke, a Nobel Prize–winning economist and former chair of the U.S. Federal Reserve.

This landmark book, co-authored by Friedman and Schwartz, is considered one of the most important economics books of the twentieth century. It radically changed the narrative of the Great Depression and reshaped the understanding of monetary policy. Through meticulous analysis of historical data, the authors argue that steady control of the money supply is crucial in managing the nation’s economy, especially during economic downturns.

One of the most significant chapters in the book, “The Great Contraction, 1929–33,” delves into the devastating impact of the Great Depression. Friedman and Schwartz contended that the Federal Reserve had the power to mitigate the severity of the Depression but failed to effectively manage the monetary system and prevent banking panics. This chapter served as a wake-up call to the monetarist school of thought, highlighting the pivotal role of the money supply in economic functioning. This idea has since influenced the policies of central banks worldwide.

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