>
Serious question: were those results really put to the test?Bernanke was already considered one of the foremost experts on the Great Depression when he was appointed Fed chairman. From a 1993 paper he co-authored on central banks' reaction to the situation (when things were still on the gold standard):
> The initial contractions in the United States and France were largely self-inflicted wounds; no binding external constraint forced the United States to deflate in 1929, and it would certainly have been possible for the French government to grant the Bank of France the power to conduct expansionary open market operations. However, Temin (1989) argues that, once these destabilizing policy measures had been taken, little could be done to avert deflation and depression, given the commitment of central banks to maintenance of the gold standard. Once the deflationary process had begun, central banks engaged in competitive deflation and a scramble for gold, hoping by raising cover ratios to protect their currencies against speculative attack. Attempts by any individual central bank to reflate were met by immediate gold outflows, which forced the central bank to raise its discount rate and deflate once again. According to Temin, even the United States, with its large gold reserves, faced this constraint. Thus Temin disagrees with the suggestion of Friedman and Schwartz (1963) that the Federal Reserve's failure to protect the U.S. money supply was due to misunderstanding of the problem or a lack of leadership; instead, he claims, given the commitment to the gold standard (and, presumably, the absence of effective central bank cooperation), the Fed had little choice but to let the banks fail and the money supply fall.
> For our purposes here it does not matter much to what extent central bank choices could have been other than what they were. For the positive question of what caused the Depression, we need only note that a monetary contraction began in the United States and France, and was propagated throughout the
world by the international monetary standard.
* http://www.nber.org/chapters/c11482
* https://www.nber.org/system/files/chapters/c11482/c11482.pdf
Flooding the market with liquidity when US inter-bank flows seized up, as well as opening international swap lines with ECB, Bank of England, Bank of Canada, etc:
* https://www.newyorkfed.org/medialibrary/media/research/curre...
* https://www.bis.org/publ/work310.pdf
* https://www.reuters.com/article/financial-fed-swaps-idUSN295...
was a direct result of understanding what went wrong during the Great Depression (at least from a banking point of view), and what could be done to prevent that part of the problem.
In March 2020, when economies were being put on lock down, similar things were done:
* https://www.reuters.com/article/us-health-coronavirus-fed-sw...
* https://www.europarl.europa.eu/cmsdata/207608/CEPS_FINAL%20o...