IDEAS home Printed from https://ideas.repec.org/p/fip/fedrwp/03-13.html
   My bibliography  Save this paper

Classical deflation theory

Author

Listed:
  • Thomas M. Humphrey

Abstract

Classical economists David Hume, Pehr Niclas Christiernin, Henry Thornton, David Ricardo, Thomas Attwood, and Robert Torrens looked beyond the redistributive (creditor-debtor) effects of deflationary monetary contraction to its adverse effects on output and employment. They attributed these effects to price-wage stickiness; to rises in real debt, tax, and cost burdens; to cash hoarding in anticipation of future price falls; and to other determinants. Addressing deflation associated with post-war resumption of gold convertibility at the old mint par, they advocated policies ranging from gradualism, to devaluation, and even to outright abandonment of the gold standard in order to avoid or mitigate deflation?s harm.

Suggested Citation

  • Thomas M. Humphrey, 2003. "Classical deflation theory," Working Paper 03-13, Federal Reserve Bank of Richmond.
  • Handle: RePEc:fip:fedrwp:03-13
    as

    Download full text from publisher

    File URL: http://www.richmondfed.org/publications/research/working_papers/2003/wp_03-13.cfm
    Download Restriction: no

    File URL: http://www.richmondfed.org/publications/research/working_papers/2003/pdf/wp03-13.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Thomas M. Humphrey, 1982. "Of Hume, Thornton, the quantity theory, and the Phillips curve," Economic Review, Federal Reserve Bank of Richmond, vol. 68(Nov), pages 13-18.
    2. Laidler,David, 1999. "Fabricating the Keynesian Revolution," Cambridge Books, Cambridge University Press, number 9780521641739, December.
    3. Hicks, J. R., 1979. "Critical Essays in Monetary Theory," OUP Catalogue, Oxford University Press, number 9780198284239.
    4. Cesarano, Filippo, 1983. "The Rational Expectations Hypothesis in Retrospect," American Economic Review, American Economic Association, vol. 73(1), pages 198-203, March.
    5. Cesarano, Filippo, 1998. "Hume's specie-flow mechanism and classical monetary theory: An alternative interpretation," Journal of International Economics, Elsevier, vol. 45(1), pages 173-186, June.
    6. David Laidler, 2000. "Highlights of the Bullionist Controversy," UWO Department of Economics Working Papers 20002, University of Western Ontario, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Goetz von Peter, 2005. "Debt-Deflation: Concepts, and a Stylised Model," Macroeconomics 0505001, University Library of Munich, Germany.

    More about this item

    Keywords

    Monetary theory; Employment; Labor productivity;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedrwp:03-13. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/frbrius.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.