Chicago, Harvard, and the Doctrinal Foundations of Monetary Economics
The relationship between Milton Friedman's monetary economics and the views espoused by Chicago and non-Chicago quantity theorists in 1930-36 is examined. Contrary to recent interpretations, Chicago economists advanced the efficacy of monetary policy as the means of escaping from the Great Depression if such a policy was implemented with budget deficits to generate monetary expansion. The use of the quantity theory of money to provide a theoretical rationale for budget deficits distinguished the Chicago economists from other quantity theorists and left them less susceptible to the Keynesian revolution. The claim that Harvard was an important center for monetary research in the early 1930s is refuted. Copyright 1997 by the University of Chicago.
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References listed on IDEAS
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- Laidler, David, 1993.
"Hawtrey, Harvard, and the Origins of the Chicago Tradition,"
Journal of Political Economy,
University of Chicago Press, vol. 101(6), pages 1068-1103, December.
- Laidler, D., 1993. "Hawtrey, Harvard, and the Origins of the Chicago Tradition," UWO Department of Economics Working Papers 9302, University of Western Ontario, Department of Economics.
- Bordo, Michael D. & Schwartz, Anna J., 1979.
"Clark Warburton: Pioneer monetarist,"
Journal of Monetary Economics,
Elsevier, vol. 5(1), pages 43-65, January.
- Henry C. Simons, 1934. "Economic Reconstruction: The Columbia Report," Journal of Political Economy, University of Chicago Press, vol. 42, pages 795-795.
- Milton Friedman & Anna J. Schwartz, 1963. "A Monetary History of the United States, 1867–1960," NBER Books, National Bureau of Economic Research, Inc, number frie63-1, 08.
- Moggridge, Donald E & Howson, Susan, 1974. "Keynes on Monetary Policy, 1910-1946," Oxford Economic Papers, Oxford University Press, vol. 26(2), pages 226-47, July.
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