Two Crises, Two Ideas and One Question
AbstractSpecific ideas about the Fisher relation between real and nominal interest rates and more general ideas about the nature of the central bank's duty to support the financial system in times of crisis were important to the Monetarist re-assessment of the causes of the Great Depression and what this event implied about the inherent stability of the market economy. Aspects of the evolution of these ideas since the Depression and the role that they have played in recent debates about the Great Recession are discussed, and some tentative conclusions about the validity of Monetarist ideas are drawn.
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Bibliographic InfoPaper provided by University of Western Ontario, Economic Policy Research Institute in its series University of Western Ontario, Economic Policy Research Institute Working Papers with number 20124.
Date of creation: 2012
Date of revision:
Contact details of provider:
Postal: Economic Policy Research Institute, Social Science Centre, University of Western Ontario, London, Ontario, Canada N6A 5C2
Phone: 519-661-2111 Ext.85244
Web page: http://economics.uwo.ca/centres/epri/
Great Depression; Great Recession; Fisher relation; interest rate; monetary policy; central bank; lender of last resort; quantitative easing; money supply; deflation; inflation; monetarism; economic stability;
Find related papers by JEL classification:
- B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-09 (All new papers)
- NEP-HIS-2012-09-09 (Business, Economic & Financial History)
- NEP-HPE-2012-09-09 (History & Philosophy of Economics)
- NEP-MON-2012-09-09 (Monetary Economics)
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