The “Great Contraction” is the period from 1929-1933 that is also called the “Great Depression.” Economist Milton Friedman (1912-2006) popularized—but did not coin—the term in his book with Anna Jacobson Schwartz, The Great Contraction 1929-1933 (1965). Friedman and Schwartz blamed the “Great Contraction” on the Federal Reserve’s failure to expand the money supply.
 
The term “Great Contraction” had been used in an economics book in 1936. Arthur F. Burns, chairman of the President Eisenhower’s Council of Economic Advisers, spoke in 1954 about “the great contraction from 1929 to ‘33.” A 1956 book by Arthur Ernest Gandolfi was titled Stability of the Demand for Money During the Great Contraction 1929-1933.
 
In 2009, the book This Time Is Different: Eight Centuries of Financial Folly by Carmen M. Reinhart and Kenneth S. Rogoff called the post-2008 financial crisis period the “Second Great Contraction.”
 
 
Wikipedia: Great Contraction
The Great Contraction is Milton Friedman’s term for the recession which led to the Great Depression.
 
Friedman labelled it thus because he believed that the depression lasted so long due to the Federal Reserve’s mismanagement. He argued that the Reserve contracted the monetary supply dramatically, prolonging the Depression, which Friedman claims could have been over by 1931.
 
Economists such as Paul Krugman refer to the similarly named (and sometimes confused with) Great Compression as a period during which economic equality rose due to the progressive tax policies instituted during the years of WWII and the policies of the Roosevelt Administration.
     
Google Books
Principles and Problems of Economics
By Otho Clifford Ault and Ernest J. Eberling
New York, NY: Longmans, Green
1937, ©1936
Pg. 415:
As a result of the great contraction of credit throughout the country, following the depression of 1929, member banks stopped borrowing at the Federal Reserve Banks.
 
14 March 1954, Springfield (MA) Republican, “Chairman Burns of Ike’s Board Feels Solon Not Interested in Anti-Recession Policy” by J. A. Livingston, pg. 10B, col. 5:
Burns (Arthur F. Burns, chairman of the president’s Council of Economic Advisers—ed.) bridled. When he got a chance to reply, he said, “I think the record ought to be straightened out. If Dr. Teper will take the trouble to compare this contraction or recession—whatever you call it—with that of 1949, that of 1937-38, not to speak of the great contraction from 1929 to ‘33, he will find that this is definitely the mildest.”
 
OCLC WorldCat record
Stability of the demand for money during the Great Contraction 1929-1933.
Author: Arthur Ernest Gandolfi
Publisher: [New York] 1956.
Edition/Format:  Book : English
 
OCLC WorldCat record
The Great Contraction 1929-1933
Author: Milton Friedman; Anna Jacobson Schwartz; National Bureau of Economic Research.
Publisher: Princeton : Princeton University Press, 1963-1965.
Edition/Format:  Book : English
 
OCLC WorldCat record
Stability of the Demand for Money During the Great Contraction—1929-1933
Author: Arthur E Gandolfi
Edition/Format:  Article : English
Publication: The Journal of Political Economy, Sep. - Oct., 1974, vol. 82, no. 5, p. 969-983
Database: JSTOR
 
OCLC WorldCat record
Could Stable Money Have Averted the Great Contraction?
Author: Michael D Bordo; Ehsan U Choudhri; Anna J Schwartz
Publisher: Huntington Beach, Calif. [etc.], Western Economic Association International [etc.].
Edition/Format:  Article : English
Publication: Economic inquiry. 33, no. 3, (1995): 484
Database: ArticleFirst
Other Databases: British Library Serials
 
OCLC WorldCat record
Bank distress during the great contraction, 1929 to 1933, new data from the archives of the board of governors
Author: Gary Richardson; National Bureau of Economic Research.
Publisher: Cambridge, Mass. : National Bureau of Economic Research, 2006.
Series: Working paper series (National Bureau of Economic Research : Online), working paper no. 12590
Edition/Format:  eBook : Document : English
 
OCLC WorldCat record
The central money market during the Great Contraction of 1929 to 1932 : the behavior of banks in New York City
Author: Patrick Van Horn
Publisher: 2007.
Dissertation: Thesis (Ph. D., Economics)—University of California, Irvine, 2007.
Edition/Format:  Thesis/dissertation : Manuscript Archival Material : English
 
Google Books
This Time Is Different:
Eight centuries of financial folly
By Carmen M. Reinhart and Kenneth S. Rogoff
Princeton, NJ: Princeton University Press
2009
Pg. 248:
The most recent global financial crisis—which we have termed the “Second Great Contraction”—is clearly the only global financial crisis that has occurred during the post-World War II period.
 
OCLC WorldCat record
Joseph Schumpeter Lecture The Great Moderation, The Great Panic, and The Great Contraction
Author: Charles Bean
Edition/Format:  Article : English
Publication: Journal of the European Economic Association, v8 n2-3 (201004): 289-325
Database: CrossRef
Other Databases: ECO; Elsevier; British Library Serials
       
New York (NY) Times
May 17, 2010, 7:48 am Legal/Regulatory
Is Ben Bernanke Having Fun Yet?
By DEALBOOK
(...)
Stanley Fischer, Mr. Bernanke’s adviser at M.I.T., had urged his student to read “The Great Contraction, 1929-1933,” in which Milton Friedman and Anna Jacobson Schwartz blamed the Fed’s failure to expand the money supply for the Depression’s severity and duration.
 
The book ignited a passion.
 
“I guess I am a Depression buff, the way some people are Civil War buffs,” Mr. Bernanke once wrote.
 
Project Syndicate
The Second Great Contraction
Kenneth Rogoff
11-08-02
CAMBRIDGE – Why is everyone still referring to the recent financial crisis as the “Great Recession”? The term, after all, is predicated on a dangerous misdiagnosis of the problems that confront the United States and other countries, leading to bad forecasts and bad policy.
(...)
But the real problem is that the global economy is badly overleveraged, and there is no quick escape without a scheme to transfer wealth from creditors to debtors, either through defaults, financial repression, or inflation.
 
A more accurate, if less reassuring, term for the ongoing crisis is the “Second Great Contraction.” Carmen Reinhart and I proposed this moniker in our 2009 book This Time is Different, based on our diagnosis of the crisis as a typical deep financial crisis, not a typical deep recession. The first “Great Contraction” of course, was the Great Depression, as emphasized by Anna Schwarz and the late Milton Friedman. The contraction applies not only to output and employment, as in a normal recession, but to debt and credit, and the deleveraging that typically takes many years to complete.