ABSTRACT
This chapter provides a brief review of the facts and theories that have been advanced as explanations for this economic disaster. A great number of economists and historians have weighed in on the Great Depression, of course, and there is no consensus on a single main cause of the depression. Advocates of Modern Monetary Theory go even further than the Keynesians in arguing that budget deficits and debt of the national government do not matter. Fiscal policy, in the form of functional finance, should take the lead in stabilizing the economy. Monetarists think about the essential role of money in a market economy. The real business cycle group thinks that economic fluctuations are caused primarily by shocks, both negative and positive, to the supply side of the economy. President Woodrow Wilson represented the United States at the Versailles Treaty negotiations, and the League of Nations was founded. But the United States did not join the League.
