scholarly journals Monetary Policy: From There to Here to Where?

2013 ◽  
pp. 1-6
Author(s):  
Mark Sniderman
Keyword(s):  
Economic Theory ◽  
Monetary Policy ◽  
Great Depression ◽  
Federal Reserve ◽  
Lessons Learned ◽  
The Past ◽  
The Great Depression ◽  
New Framework

Drawing from his long experience participating in the policymaking process at the Federal Reserve, chief policy officer Mark Sniderman shares his views on how the Federal Reserve's framework for conducting monetary policy has evolved over the past decade. He explains how changes in economic theory have helped shaped this new framework and how lessons learned from the Great Depression and Japan's recent struggle with deflation have contributed. This Commentary is based on a speech delivered at the Global Interdependence Conference, Tokyo, Japan, on December 4, 2012.

scholarly journals Shifts in US Federal Reserve Goals and Tactics for Monetary Policy: A Role for Penitence?

2013 ◽  
Vol 27 (4) ◽  
pp. 65-86 ◽  
Author(s):  
Julio J Rotemberg
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Great Depression ◽  
Federal Reserve ◽  
Bank Loans ◽  
The Great Depression

This paper considers some of the large changes in the Federal Reserve's approach to monetary policy. It shows that, in some important cases, critics who were successful in arguing that past Fed approaches were responsible for mistakes that caused harm succeeded in making the Fed averse to these approaches. This can explain why the Fed stopped basing monetary policy on the quality of new bank loans, why it stopped being willing to cause recessions to deal with inflation, and why it was temporarily unwilling to maintain stable interest rates in the period 1979–1982. It can also contribute to explaining why monetary policy was tight during the Great Depression. The paper shows that the evolution of policy was much more gradual and flexible after the Volcker disinflation, when the Fed was not generally deemed to have made an error.

Back to Basics: Reserve Requirements and Money Stock Changes, 1929–1936

2000 ◽  
Vol 44 (1) ◽  
pp. 62-69 ◽  
Author(s):  
Robert F. Stauffer
Keyword(s):  
Monetary Policy ◽  
Great Depression ◽  
Federal Reserve ◽  
Money Stock ◽  
Reserve Requirement ◽  
Reserve Requirements ◽  
Money Multiplier ◽  
The Great Depression

This paper explains how the shift of deposits from nonmember banks and country banks to larger member banks increased the average or “effective” reserve requirement in the 1929–1936 period. The result was an inappropriate tightening of monetary conditions, along with liquidity problems for those banks most susceptible to failure. A basic money multiplier model is developed to help clarify the possible impact of increases in effective reserve requirements. The resulting perspective strengthens the usual charges against the Federal Reserve of monetary policy malfeasance during the Great Depression.

Monetary Politics: Origins of the Federal Reserve

2013 ◽  
Vol 27 (1) ◽  
pp. 1-13 ◽  
Author(s):  
Sarah Binder ◽  
Mark Spindel
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Great Depression ◽  
Federal Reserve ◽  
Hybrid Structure ◽  
The Great Depression ◽  
Reserve Bank ◽  
Political Interests ◽  
Reserve System ◽  
Selection Of

Nearly unique amongst the world's monetary bodies, the Federal Reserve defies description as a central bank. A century after its creation, the Fed retains a hybrid structure of a president-appointed, Senate-confirmed Washington board and twelve largely privately directed regional reserve banks—each of which remains moored in the cities originally selected in 1914. In this article we investigate the origins of the Federal Reserve System, focusing on the selection of the twelve reserve bank cities. In contrast to accounts that suggest politics played no role in the selection of the cities, we suggest that a range of political interests shaped Democrats' choices in designing the reserve system. The result was a decentralized institution that initially proved unable to coordinate monetary policy—a key contributor to the onset of the Great Depression less than two decades later.

scholarly journals An Overview of the Evolution of Modern Macroeconomic Theories

2020 ◽  
Vol 9 (2) ◽  
Author(s):  
Zijian Liang ◽  
Michael Silber
Keyword(s):  
Economic Theory ◽  
Monetary Policy ◽  
Fiscal Policy ◽  
Great Depression ◽  
Phillips Curve ◽  
18Th Century ◽  
The United States ◽  
Macroeconomic Policies ◽  
The Great Depression ◽  
Classical Economic

This paper examines the evolution of macroeconomic theories from the 18th century to present. The manuscript starts off on giving a short analysis on the Great Depression and how it sparked numerous changes in macroeconomic policies. Then, the Classical Economic Theory is introduced and its shortcomings are examined through the Panic of 1873. Next, the paper's focus will shift to a deeper analysis on the causes, impacts, and the recovery of the Great Depression and the effects it had on the United States economy. Keynesianism and the benefits of fiscal policy are introduced and reasons for the rejection of the Classical Economic theory are explained. William Phillips' Phillips Curve is then introduced and connections between Phillips' theory and Keynes' theory are made. Lastly, the paper will examine the effects of monetary policy in the 1970s and the recent Great Recession of 2008. Most importantly, the reasons modern economists like Friedman oppose fiscal policy and Keynesianism are interpreted. From the works of these economists, the central argument of the paper advocates for the fact that we can no longer rely on the Classical Economic theory during times of economic crisis. The modern economy should be observing both Keynesianism and Monetarism; we should be pursuing expansionary fiscal policy during times of downturns and contractionary monetary policy during times of economic boom.

Anatolian Peasants in the Great Depression 1929–1933

2000 ◽  
Vol 23 ◽  
pp. 79-102 ◽  
Author(s):  
Elif Akçetin
Keyword(s):  
International Trade ◽  
Stock Market ◽  
Great Depression ◽  
Economic Policies ◽  
Stock Market Crash ◽  
Sudden Drop ◽  
The Past ◽  
The Great Depression ◽  
Area Of Study

The effects of the Great Depression of 1929 on peasants in Turkey is an area of study that has remained neglected, despite the fact that peasants then constituted 75 percent of the population. The reason why the condition of peasants has not attracted much attention is the dramatic change between the economic policies of the 1920s and those of the 1930s. The immediate consequence of the stock-market crash and the sudden drop in prices was the shrinkage of international trade. Governments dealt with the depression by implementing quotas on imports, and liberal economic policies were no longer considered successful. Protectionism became the most popular policy for the management of economies in difficulty. The change in economic policies during this period constituted a break with the past and therefore has been the principal focus of studies on the Great Depression.

War and the Next Lesson

Money ◽  
2017 ◽  
Author(s):  
John Kenneth Galbraith ◽  
James K. Galbraith
Keyword(s):  
United States ◽  
Monetary Policy ◽  
World War Ii ◽  
Fiscal Policy ◽  
World War I ◽  
Great Depression ◽  
The United States ◽  
World War ◽  
John Maynard Keynes ◽  
The Great Depression

This chapter examines the lessons of World War II with respect to money and monetary policy. World War I exposed the fragility of the monetary structure that had gold as its foundation, the great boom of the 1920s showed how futile monetary policy was as an instrument of restraint, and the Great Depression highlighted the ineffectuality of monetary policy for rescuing the country from a slump—for breaking out of the underemployment equilibrium once this had been fully and firmly established. On the part of John Maynard Keynes, the lesson was that only fiscal policy ensured not just that money was available to be borrowed but that it would be borrowed and would be spent. The chapter considers the experiences of Britain, Germany, and the United States with a lesson of World War II: that general measures for restraining demand do not prevent inflation in an economy that is operating at or near capacity.

scholarly journals The euro and the recent European crisis vis-à-vis the gold standard and the great depression: institutionalities, specificities and interfaces

2017 ◽  
Vol 37 (1) ◽  
pp. 147-166 ◽  
Author(s):  
GIULIANO CONTENTO DE OLIVEIRA ◽  
PAULO JOSÉ WHITAKER WOLF
Keyword(s):  
Great Depression ◽  
Gold Standard ◽  
Institutional Arrangements ◽  
European Countries ◽  
Lender Of Last Resort ◽  
Central European ◽  
The Past ◽  
The Great Depression ◽  
European Crisis ◽  
Harmful Effects

ABSTRACT The paper aims to establish interfaces between the Great Depression of the 1930s under the Gold Standard and the recent European Crisis under the Euro. It is argued that, despite their specificities, both crises revealed the potentially harmful effects, in economic and social terms, of institutional arrangements that considerably reduce the autonomy of monetary, fiscal and exchange rate policies of participating countries, without being accompanied by increased cooperation between them, which should be led by a global (in the case of the Great Depression) or regional (in the case of the European Crisis) hegemonic power, which is not only capable of, but is also willing to act as a buyer and lender of last resort, especially in circumstances characterized by increased uncertainty, the deterioration of the general state of expectations and increased liquidity preference. In fact, central European countries in the past and peripheral European countries nowadays were effectively pushed toward deflationary adjustments in which a reduction of prices and wages was accompanied by a reduction of output and employment levels. Thus, in the absence of the possibility of restoring the autonomy of economic policy, the overcome of the crisis necessarily requires, both before - under the Gold Standard - and nowadays - under the Euro -, joint actions aimed to assure that the responsibility for the adjustment will be equally distributed among all the economies, in order to avoid that some of them benefit at the expense of the others in this process.

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