The stock market crash transmitted to the real economy through an uncertainty mechanism: because 1920s borrowing depended on the perception that times were improving (with the stock market as the index of that), the crash triggered an immediate collapse in consumer spending and borrowing, visible in plummeting new automobile registrations through 1930.

causalpending

Speaker

Eric Rauchway

Evidence Quote

Then then you you have an immediate transfer via this uh uncertainty mechanism to what we we call the real economy right now.

Source

Eric Rauchway on the Great Depression and the New Deal 12/01/2008EconTalk
Created: 6/17/2026, 10:09:28 AM

My Notes

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