Joseph Stiglitz claims that the Great Depression was a result of improper oversight over a re-structuring economy, as the agricultural sector gave way and the industrial sector grew. If we do not learn the lesson, argues Stiglitz, we will suffer similar consequences as the market restructures from an industrial one to a service one.
I think, like other theories of industrial fluctuations, Stiglitz’ is a very broad empirical claim. Unsurprisingly, the causality is a bit sketchy. Certainly, the structural revolution that took place between ~1865 and 1914 did not cause a “great” depression — this period, in fact, was one of great growth for the United States.
In short, Stiglitz’ explanation does not stick.