Fed’s response may highlight its weakness

The Great Depression following the Wall Street crash of 192 9 has been widely blamed on the flawed policy response of the US Federal Reserve.

Most famously, the father of monetary economics, the late Milton Friedman, argued that the collapse of the US money supply by a third between 1929 and 1933 turned a brutal day on the stockmarket into a multi-year depression.

In Friedman’s view, the failure of the Federal Reserve to ...