To a first approximation, the question of how the Great Depression spread from country to country is short and straightforward: fixed exchange rates under the gold standard transmitted negative demand shocks. The first half of this paper will describe current thinking about the relationship between the gold standard and the Great Depression. The second half of the paper will look at a phenomenon not included in this first approximation: financial crises. Many have noted that banking panics and currency crises are bad for national economies, but few have tried to model their international spread.
Monetary Intervention Mitigated Banking Panics During the Great Depression: Quasi-Experimental Evidence from the Federal Reserve District Border in Mississippi, 1929 to 1933