Question: What is the reason economists gave for the great depression during 1920s?
About the article "Great Depression", section "Inequality".

Candidate passages:
Heterodox theories.
Austrian School.
Austrian economists argue that the Great Depression was the inevitable outcome of the monetary policies of the Federal Reserve during the 1920s.
In their opinion, the central bank's policy was an "easy credit policy" which led to an unsustainable credit-driven boom.
In the Austrian view, the inflation of the money supply during this period led to an unsustainable boom in both asset prices (stocks and bonds) and capital goods.
By the time the Federal Reserve belatedly tightened monetary policy in 1928, it was too late to avoid a significant economic contraction.
Austrians argue that government intervention after the crash of 1929 delayed the market’s adjustment and made the road to complete recovery more difficult.
Acceptance of the Austrian explanation of what primarily caused the Great Depression is compatible with either acceptance or denial of the Monetarist explanation.
Austrian economist Murray Rothbard, who wrote "America's Great Depression" (1963), rejected the Monetarist explanation.
He criticized Milton Friedman's assertion that the central bank failed to sufficiently increase the supply of money, claiming instead that the Federal Reserve did pursue an inflationary policy when, in 1932, it purchased $1.1 billion of government securities, which raised its total holding to $1.8 billion.
Rothbard says that despite the central bank's policies, "total bank reserves only rose by $212 million, while the total money supply fell by $3 billion".
The reason for this, he argues, is that the American populace lost faith in the banking system and began hoarding more cash, a factor very much beyond the control of the Central Bank.
The potential for a run on the banks caused local bankers to be more conservative in lending out their reserves, which, according to Rothbard's argument, was the cause of the Federal Reserve's inability to inflate.
Friedrich Hayek, another prominent Austrian economist, disagreed with Rothbard's criticism of the Monetarist explanation.
In 1975, Hayek admitted that he made a mistake in the 1930s in not opposing the Central Bank's deflationary policy and stated the reason why he had been ambivalent: "At that time I believed that a process of deflation of some short duration might break the rigidity of wages which I thought was incompatible with a functioning economy.
In 1978, he made it clear that he agreed with the point of view of the Monetarists, saying, "I agree with Milton Friedman that once the Crash had occurred, the Federal Reserve System pursued a silly deflationary policy", and that he was as opposed to deflation as he was to inflation.
Concordantly, economist Lawrence White argues that the business cycle theory of Hayek is inconsistent with a monetary policy which permits a severe contraction of the money supply. 
The book was the first to present the then novel argument that excessively tight monetary policy by the Federal Reserve following the boom of the 1920s turned an otherwise normal recession into the Great Depression of the 1930s.
Previously, the consensus of economists was that loss of investor and consumer confidence following the Wall Street Crash of 1929 was the primary cause of the Great Depression.
The chapter on the Great Depression, entitled "The Great Contraction, 1929–33", was published as a stand-alone paperback in 1965.
The "Monetary History" was lauded as one of the most influential economics books of the twentieth century by the Cato Institute book forum in 2003.
It was also cited with approval in a 2002 speech by then-Federal Reserve board member Ben Bernanke stating "the direct and indirect influences of the Monetary History on contemporary monetary economics would be difficult to overstate", and again in a 2004 speech as "transform the debate about the Great Depression".
However, some economists like Peter Temin have raised questions about whether or not most monetary quantity levels have been exogenously determined, as A Monetary History argues especially during the Depression.
Moreover, the authors lay most of the blame upon the Federal Reserve for not doing enough to prevent the Depression.
Barry Eichengreen in The Golden Fetters has argued that due to the gold exchange standard then prevailing internationally, the Federal Reserve's hands were tied to maintain gold credibility and couldn't undertake actions to drastically increase the money supply in the manner advocated by Friedman and Schwartz.
James Tobin, while appreciate the rigor with which Friedman and Schwartz demonstrated the importance of the monetary supply, questions their measures of the velocity of money and how informative this measure of the frequency of monetary transactions really is to understanding the macroeconomic fluctuations of the early-to-mid 20th century. 
Leave-it-alone liquidationism (1929–1933).
From the point of view of today's mainstream schools of economic thought, government should strive to keep some broad nominal aggregate on a stable growth path (for proponents of new classical macroeconomics and monetarism, the measure is the nominal money supply; for Keynesian economists it is the nominal aggregate demand itself).
During a depression the central bank should pour liquidity into the banking system and the government should cut taxes and accelerate spending in order to keep the nominal money stock and total nominal demand from collapsing.
The United States government and the Federal Reserve did not do that during the 1929‑32 slide into the Great Depression The existence of "liquidationism" played a key part in motivating public policy decisions not to fight the gathering Great Depression.
An increasingly common view among economic historians is that the adherence of some Federal Reserve policymakers to the liquidationist thesis led to disastrous consequences.
Regarding the policies of President Hoover, economists like Barry Eichengreen and J. Bradford DeLong point out that the Hoover administration’s fiscal policy was guided by liquidationist economists and policy makers, as Hoover tried to keep the federal budget balanced until 1932, when Hoover lost confidence in his Secretary of the Treasury Andrew Mellon and replaced him.
Hoover wrote in his memoirs he did not side with the liquidationists, but took the side of those in his cabinet with "economic responsibility", his Secretary of Commerce Robert P. Lamont and Secretary of Agriculture Arthur M. Hyde, who advised the President to "use the powers of government to cushion the situation".
But at the same time he kept Andrew Mellon as Secretary of the Treasury until February 1932.
It was during 1932 that Hoover began to support more aggressive measures to combat the Depression.
In his memoirs, President Hoover wrote bitterly about members of his Cabinet who had advised inaction during the downslide into the Great Depression:Before the "Keynesian Revolution", such a liquidationist theory was a common position for economists to take and was held and advanced by economists like Friedrich Hayek, Lionel Robbins Joseph Schumpeter, Seymour Harris and others.
According to the liquidationists a depression is good medicine.
The function of a depression is to liquidate failed investments and businesses that have been made obsolete by technological development in order to release factors of production (capital and labor) from unproductive uses.
These can then be redeployed in other sectors of the technologically dynamic economy.
They pointed to the short duration of the Depression of 1920–21 was due to the policy of letting the liquidation occur and argued that the crisis had laid the groundwork for the prosperity of the later 1920s.
They pushed for deflationary policies (which were already executed in 1921) which – in their opinion – would assist the release of capital and labor from unproductive activities to lay the groundwork for a new economic boom.
The liquidationists argued that even if self-adjustment of the economy took mass bankruptcies, then so be it.
Postponing the liquidation process would only magnify the social costs.
Schumpeter wrote that itDespite liquidationist expectations, a large proportion of the capital stock was not redeployed and vanished during the first years of the Great Depression.
According to a study by Olivier Blanchard and Lawrence Summers, the recession caused a drop of net capital accumulation to pre-1924 levels by 1933. 
The Federal Reserve is lauded by some economists, while being the target of scathing criticism by other economists, legislators, and sometimes members of the general public.
The former Chairman of the Federal Reserve Board, Ben Bernanke, is one of the leading academic critics of the Federal Reserve's policies during the Great Depression. 
In the 1830s, French political thinker and historian Alexis de Tocqueville identified one of the key characteristics of America that would later make it so amenable to the development of mass production: the homogeneous consumer base.
De Tocqueville wrote in his "Democracy in America" (1835) that "The absence in the United States of those vast accumulations of wealth which favor the expenditures of large sums on articles of mere luxury... impact to the productions of American industry a character distinct from that of other countries' industries.
is geared toward articles suited to the wants of the whole people".
Mass production improved , which was a contributing factor to economic growth and the decline in work week hours, alongside other factors such as transportation infrastructures (canals, railroads and highways) and agricultural mechanization.
These factors caused the typical work week to decline from 70 hours in the early 19th century to 60 hours late in the century, then to 50 hours in the early 20th century and finally to 40 hours in the mid-1930s.
Mass production permitted great increases in total production.
Using a European crafts system into the late 19th century it was difficult to meet demand for products such as sewing machines and animal powered mechanical harvesters.
By the late 1920s many previously scarce goods were in good supply.
One economist has argued that this constituted "overproduction" and contributed to high unemployment during the Great Depression.
Say's law denies the possibility of general overproduction and for this reason classical economists deny that it had any role in the Great Depression.
Mass production allowed the evolution of consumerism by lowering the unit cost of many goods used.