Market-oriented folk blame Smoot Hawley for worsening the Great Depression. Skeptics point out that trade was a small part of the American economy in the ’30s so Smoot Hawley couldn’t haven’t been very important. Thomas Rustici in this EconTalk podcast argues that the skeptics have missed the monetary impacts of Smoot Hawley–the bank runs of the ’30s were concentrated in regions and cities that were dependent on exports.
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