Financial crises and international economic integration amidst capital flows and aggregate demand. A tentative comparison between the 1920s and the 1970s downturns

This article reverses a widely-shared scholarly view of a positive correlation between
transnational capital supply and domestic aggregate demand during the twentieth century
traditionally aimed at considering capital supply a fly-wheel for domestic growth. By
drawing on both the most authoritative literature and statistical data, it does explore
such relationship through a comparison between the two most striking economic meltdowns of the last century during the late 1920s and amidst the two oil crises of the
1970s. This comparison is conducted through a consistent exploration of the role that
national monetary authorities, first and foremost the U.S. Federal Reserve, and international economic institutions, had in helping out restore a balanced ratio between
capital supply and consumer demand anytime monetary policies or macroeconomic
conditions undermined it.