RDP 9303: The 1893 Bank Crashes and Monetary Aggregates 6. Conclusions

The revised series of monetary aggregates presented in this paper suggest a monetary contraction of unparalleled proportions in Australian history^[14]. During the 1930s depression M3 fell by 13.33 per cent from its peak in the second quarter of 1928 to the third quarter of 1931. It had recovered to the 1928 figure in nominal terms by the second quarter in 1936 (Schedvin, 1970, pp. 203–210 and Appendix C, Table C-1, pp. 384–387). The contractions of broad money aggregates in 1946, 1952 and 1956 were minor by comparison and all had been recovered within the next year (Pope, 1986, Table 2). The relative magnitude of the monetary disturbance of the 1890s raises the question about the relationship between movements in monetary aggregates and the real economy in Australia from the banking crisis up until World War I.

Footnote

Juttner (1987) presents an annual series of M1 percentage change from 1900 to 1984, p. 84. [14]