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Hawtreyan ‘Credit Deadlock’ or Keynesian ‘Liquidity Trap’? Lessons for Japan from the Great Depression

In: David Laidler’s Contributions to Economics

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  • Roger J. Sandilands

Abstract

In this chapter, much inspired by David Laidler’s work in the field of monetary theory and policy, I shall compare the mistakes of monetary policy before and during the Great Depression in the United States in the 1930s with the conduct of monetary policy in Japan since the late 1980s.

Suggested Citation

  • Roger J. Sandilands, 2010. "Hawtreyan ‘Credit Deadlock’ or Keynesian ‘Liquidity Trap’? Lessons for Japan from the Great Depression," Palgrave Macmillan Books, in: Robert Leeson (ed.), David Laidler’s Contributions to Economics, chapter 15, pages 335-371, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-24841-0_15
    DOI: 10.1057/9780230248410_15
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    References listed on IDEAS

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    1. David Laidler & Roger Sandilands, 2002. "An Early Harvard Memorandum on Anti-Depression Policies: An Introductory Note," History of Political Economy, Duke University Press, vol. 34(3), pages 515-532, Fall.
    2. Mauro Boianovsky, 2004. "The IS-LM Model and the Liquidity Trap Concept: From Hicks to Krugman," History of Political Economy, Duke University Press, vol. 36(5), pages 92-126, Supplemen.
    3. Barber,William J., 2006. "Designs within Disorder," Cambridge Books, Cambridge University Press, number 9780521034319, October.
    4. G. J. Santoni, 1987. "The great bull markets 1924-29 and 1982-87: speculative bubbles or economic fundamentals?," Review, Federal Reserve Bank of St. Louis, issue Nov, pages 16-30.
    5. repec:ucp:bkecon:9780226519999 is not listed on IDEAS
    6. Kazuo Ueda, 2005. "The Bank of Japan's Struggle with the Zero Lower Bound on Nominal Interest Rates: Exercises in Expectations Management," International Finance, Wiley Blackwell, vol. 8(2), pages 329-350, August.
    7. Mitsuhiro Fukao, 2005. "The Effects of 'Gesell' (Currency) Taxes in Promoting Japan's Economic Recovery," Hi-Stat Discussion Paper Series d05-94, Institute of Economic Research, Hitotsubashi University.
    8. L. G. Telser, 2001. "Higher Member Bank Reserve Ratios in 1936 and 1937 Did Not Cause the Relapse into Depression," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 24(2), pages 205-216, December.
    9. Alexander J. Field, 2003. "The Most Technologically Progressive Decade of the Century," American Economic Review, American Economic Association, vol. 93(4), pages 1399-1413, September.
    10. John Smithin, 2004. "Keynes, Chicago and Friedman: A review essay," Journal of Economic Studies, Emerald Group Publishing, vol. 31(1), pages 76-88, January.
    11. Laidler, David E W, 1991. "Karl Brunner's Monetary Economics--An Appreciation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 23(4), pages 633-658, November.
    12. Sweezy, Alan R, 1972. "The Keynesians and Government Policy, 1933-1939," American Economic Review, American Economic Association, vol. 62(2), pages 116-124, May.
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Optimum Taxation Policy and the Impact of Public Debt Under Modern Monetary Theory
      by andrew lainton in Decisions, Decisions, Decisions on 2013-04-26 14:29:27

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    Cited by:

    1. Michael T. Belongia & Peter N. Ireland, 2018. "Targeting Constant Money Growth at the Zero Lower Bound," International Journal of Central Banking, International Journal of Central Banking, vol. 14(2), pages 159-204, March.
    2. Andrzej Slawinski, 2015. "Shielding money creation from severe banking crises: How useful are proposals offered by the alternative reform plans?," Bank i Kredyt, Narodowy Bank Polski, vol. 46(3), pages 191-206.
    3. K. Vela Velupillai, 2010. "The 'Minsky Moment' - A Critique and a Re-construction," ASSRU Discussion Papers 1009, ASSRU - Algorithmic Social Science Research Unit.
    4. Belongia, Michael T. & Ireland, Peter N., 2017. "Circumventing the zero lower bound with monetary policy rules based on money," Journal of Macroeconomics, Elsevier, vol. 54(PA), pages 42-58.
    5. Tim Congdon, 2021. "Can central banks run out of ammunition? The role of the money‐equities‐interaction channel in monetary policy," Economic Affairs, Wiley Blackwell, vol. 41(1), pages 21-37, February.

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    More about this item

    Keywords

    Interest Rate; Monetary Policy; Central Bank; Fiscal Policy; Money Supply;
    All these keywords.

    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • B23 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Econometrics; Quantitative and Mathematical Studies
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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