Austrian economist Murray Rothbard has argued that government intervention during 1929 made what could have been a 1-year recession set off by the stock market crash into a 12-year depression. He believed that by creating confusing signals, government intervention kept investors from gaining knowledge of what investments to avoid.

a. Is Rothbard’s explanation of the Depression consistent with the AS/AD model? 

b. If one agrees with Rothbard, how would one’s proposed policies to deal with recessions differ from those presented in the book? (Austrian)