The Effect of New Deal Policies Revisited

2020 ◽  
Author(s):  
Yangyang Ji
Keyword(s):  
New Deal ◽  
Aggregate Demand ◽  
American Economic Review ◽  
Supply Side ◽  
Natural Rate ◽  
Jel Codes ◽  
The Great Depression ◽  
Us Economy ◽  
The Us ◽  
The New Deal

Abstract Eggertsson (2012, American Economic Review, 102, 524–55) finds that when the nominal interest rate hits the zero lower bound, the aggregate demand (AD) curve becomes upward-sloping and supply-side policies that reduce the natural rate of output, such as the New Deal implemented in the 1930s, are expansionary. His analysis is restricted to a conventional equilibrium where the AD curve is steeper than the aggregate supply (AS) curve. Recent research, however, demonstrates that an alternative equilibrium arises if the AD curve is flatter than the AS curve. In that case, the same policies become contractionary. In this article, I allow for both possibilities, and let data decide which equilibrium the US economy actually resided in during the Great Depression. Following the work of Blanchard and Quah (1989, American Economic Review, 79, 655–73), I find that there is a high probability that New Deal policies were contractionary. (JEL codes: E32, E52, E62, N12).

HARVARD MEETS THE CRISIS: THE MONETARY THEORY AND POLICY OF LAUCHLIN B. CURRIE, JACOB VINER, JOHN H. WILLIAMS, AND HARRY D. WHITE

2015 ◽  
Vol 37 (3) ◽  
pp. 387-410 ◽  
Author(s):  
Michele Alacevich ◽  
Pier Francesco Asso ◽  
Sebastiano Nerozzi
Keyword(s):  
Great Depression ◽  
New Deal ◽  
Policy Decision ◽  
John Maynard Keynes ◽  
The Great Depression ◽  
Professional Careers ◽  
Eclectic Approach ◽  
The Us ◽  
Analytical Perspective ◽  
The New Deal

The paper discusses the interpretation of the Great Depression and the policy decision making by four Harvard economists: Lauchlin B. Currie, Jacob Viner, John H. Williams, and Harry D. White. All were eminent scholars in the field of monetary and international economics, and were deeply involved in policy decisions during the New Deal. We will discuss how their Harvard training provided them with a common methodological and analytical perspective, and how this common perspective translated into specific policies when they moved from the academia to public service in the US administration. Their interpretation of the causes of the Great Depression and their policy proposals show the eclectic approach that these four economists had to monetary, fiscal, and economic analysis, and the points of contact with both the US monetarist tradition and the work of John Maynard Keynes. At the same time, this very eclecticism, far from making them part of the monetarist or the Keynesian schools, characterized them as a group of their own: a network of scholars who, by virtue of their studies and the evolution of their professional careers, developed a style of analysis and policy prescriptions that deeply influenced the nature of the New Deal.

The Second Red Scare and the Unmaking of the New Deal Left

2012 ◽  
Author(s):  
Landon R. Y. Storrs
Keyword(s):  
New Deal ◽  
Red Scare ◽  
Loyalty Program ◽  
Federal Employee ◽  
The Great Depression ◽  
Policy Ideas ◽  
Political Views ◽  
Consumer Movements ◽  
The Right ◽  
The New Deal

The loyalty investigations triggered by the Red Scare of the 1940s and 1950s marginalized many talented women and men who had entered government service during the Great Depression seeking to promote social democracy as a means to economic reform. Their influence over New Deal policymaking and their alliances with progressive labor and consumer movements elicited a powerful reaction from conservatives, who accused them of being subversives. This book draws on newly declassified records of the federal employee loyalty program—created in response to fears that Communists were infiltrating the U.S. government—to reveal how disloyalty charges were used to silence these New Dealers and discredit their policies. Because loyalty investigators rarely distinguished between Communists and other leftists, many noncommunist leftists were forced to leave government or deny their political views. This book finds that loyalty defendants were more numerous at higher ranks of the civil service than previously thought, and that many were women, or men with accomplished leftist wives. Uncovering a forceful left-feminist presence in the New Deal, the book shows how opponents on the Right exploited popular hostility to powerful women and their “effeminate” spouses. The loyalty program not only destroyed many promising careers, it prohibited discussion of social democratic policy ideas in government circles, narrowing the scope of political discourse to this day. This book demonstrates how the Second Red Scare undermined the reform potential of the New Deal and crippled the American welfare state.

scholarly journals Demand and Defective Growth Patterns: The Role of The Tradable and Non-Tradable Sectors in an Open Economy

2014 ◽  
Vol 104 (5) ◽  
pp. 272-277 ◽  
Author(s):  
Sandile Hlatshwayo ◽  
Michael Spence
Keyword(s):  
Open Economy ◽  
Aggregate Demand ◽  
Value Added ◽  
Growth Patterns ◽  
Structural Elements ◽  
Total Income ◽  
Us Economy ◽  
The Us ◽  
Tradable Sector

This paper examines the underlying structural elements of US growth patterns, pre- and post-crisis. Prior to the recession, the US economy exhibited a defective growth pattern driven by outsized domestic demand. As domestic aggregate demand retreats to more sustainable levels relative to total income, the tradable side of the economy is a catalyst for restoring strong growth. A structural rebalancing is already underway; although it is only a third of the economy, the tradable sector generated more than half of gross gains in value-added since the start of the recovery. However, distributional issues loom on the horizon.

Boston, the Great Depression and the New Deal

1978 ◽  
Vol 51 (1) ◽  
pp. 136
Author(s):  
Robert K. Murray ◽  
Charles H. Trout
Keyword(s):  
Great Depression ◽  
New Deal ◽  
The Great Depression ◽  
The New Deal
Sign in / Sign up

Export Citation Format

Share Document