According to Friedman and Schwartz, each of these policy mistakes led to an undesirable tightening of monetary policy, as reflected in sharp declines in the money supply.
13 Based on the work of economist Hyman Minsky, this is the sudden onset of a market crash when sentiment shifts following a period of rapid speculative growth. 12  -8back to the stress tests I mentioned earlier. Each year the Federal Reserve stresses the largest banks against a hypothetical severe macroeconomic scenario.