Ricardo versus Thornton on the appropriate monetary response to supply shocks
David Ricardo (1772-1823) recommended countering supply shocks with monetary contraction. Henry Thornton (1760-1815) advised a constant-money response. Their views hinged (1) on the neutrality or non-neutrality of money-stock changes on real output and employment and (2) on the costs of inflation. These same considerations influence Federal Reserve policy in response to oil shocks today.
Volume (Year): (1990)
Issue (Month): Nov ()
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- Matthew D. Shapiro, 1987.
"Supply Shocks in Macroeconomics,"
Cowles Foundation Discussion Papers
821, Cowles Foundation for Research in Economics, Yale University.
- Fischer, Stanley, 1985. "Supply Shocks, Wage Stickiness, and Accommodation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 17(1), pages 1-15, February.
- O'Brien, D P, 1981. "Ricardian Economics and the Economics of David Ricardo," Oxford Economic Papers, Oxford University Press, vol. 33(3), pages 352-86, November.
- James C. W. Ahiakpor, 1985. "Ricardo on Money: The Operational Significance of the Non-Neutrality of Money in the Short Run," History of Political Economy, Duke University Press, vol. 17(1), pages 17-30, Spring.
- Robert M. Solow, 1980. "What to Do (Macroeconomically) When OPEC Comes," NBER Chapters, in: Rational Expectations and Economic Policy, pages 249-267 National Bureau of Economic Research, Inc.
- Charles F. Peake, 1978. "Henry Thornton and the Development of Ricardo's Economic Thought," History of Political Economy, Duke University Press, vol. 10(2), pages 193-212, Summer.
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