Barro and the Financial Illusion

Barro and his five books, finally, two thirds of the way down he explains what caused the Great Depression.

No I think what is much clearer is the role of the financial system and the credit implosion, both in the 1930s and today. The rest of the stuff may just be a sideshow, it may not be that important.

I have a question for all the great experts on the Great Depression, find me a depression that did not have a credit cycle, or else explain to me how we could go through 200 years of great technological advance without a major leverage cycle?

When we measure crashes, ex post, using the unit of account, it has to be a leverage cycle if it is a crash. When we measure crashes, ex ante, using the unit of account, we have no crash, the prediction goes away. The question monetary economists might ask is why do bankers miss sudden changes in real constraints? How about sudden changes in real constraints are hidden from the banker, they are a technological change that has not appeared and is not measured.