If Hayek had know the facts, perhaps he would have located the principle source of the Depression in France, and not so much in America. Based on later, better data, Hayek concluded that the length and depth of the Depression was significantly enlarged by pathological deflationary policies — problems caused in large part by a failure to understand and follow the rules necessary for a non-pathologically functioning gold standard. Unknown to Hayek, it looks like many of these mistakes were happening earlier than Hayek ever imagined. ht Macro Musings.
UPDATE: Read a free PDF draft of Irwin’s paper here.