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Monday, July 13, 2020 | History

2 edition of Could a monetary base rule have prevented the Great Depression? found in the catalog.

Could a monetary base rule have prevented the Great Depression?

Bennett T. McCallum

Could a monetary base rule have prevented the Great Depression?

by Bennett T. McCallum

  • 398 Want to read
  • 10 Currently reading

Published by National Bureau of Economic Research in Cambridge, MA .
Written in English

    Subjects:
  • Monetary policy -- United States.,
  • Monetary policy -- Econometric models.,
  • Money supply -- United States.,
  • Log-linear models.,
  • United States -- Economic conditions -- 1918-1945.

  • Edition Notes

    StatementBennett T. McCallum.
    SeriesNBER working paper series -- working paper no. 3162, Working paper series (National Bureau of Economic Research) -- working paper no. 3162.
    The Physical Object
    Pagination42 p. :
    Number of Pages42
    ID Numbers
    Open LibraryOL22436855M

      Friedman's claim that monetary policy could have prevented the Great Depression was an attempt to refute the analysis of John Maynard Keynes, who argued that monetary policy is ineffective under.   But in the original piece on the great depression, it was not monetary base but true money supply he emphasized (i.e. he money people have to spend) — INCLUDING deposits (which the above number does not include), but NOT including reserves AT THE FEDERAL reserve, which is the MAJOR reason monetary base looks like it rising in the above graph.

    7) that while there is a consensus among economists about expanding the monetary-base as the best “emergency strategy” when facing a possible secondary contraction, Bernanke could have avoided micro-engineering and the favoritism and moral hazard that it implies, and opted for open market operations, rather than the selective rescue of some. McCallum, B. T. () ‘Could a Monetary Base Rule have Prevented the Great Depression?’, Journal of Monetary Economics, 26, 3– CrossRef Google Scholar —() ‘Role of the Minimal State Variable Criterion in Rational Expectations Models’, Working Paper, NBER Working Paper ; also in P. Isard, A. Razin and A. K. Rose (eds.

      Considering the ignorance, misrepresentations (& blatant lies) told to absolve the Federal Reserve of its responsibility for creating the Great Depression (through its monetary policy errors both before & after Oct ), one can only wish pgs in Vol 1 will someday become required reading for ALL s: 5. The depression originated in the U.S., starting with the fall in stock prices that began around September 4, and became worldwide news with the stock market crash of Octo (known as Black Tuesday). The Great Depression Personal income, tax revenue, profits and prices dropped, while international trade plunged by more than 50%.


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Could a monetary base rule have prevented the Great Depression? by Bennett T. McCallum Download PDF EPUB FB2

Get this from a library. Could a monetary base rule have prevented the Great Depression?. [Bennett T McCallum; National Bureau of Economic Research.]. Downloadable. This paper continues an ongoing investigation of the properties of a specific, quantitative, and operational rule for the conduct of monetary policy, a rule that specifies settings of the monetary base that are designed to keep nominal GNP growing smoothly at a noninflationary rate.

Whereas previous studies have examined the rule's performance in the context of United States. Get this from a library. Could a monetary base rule have prevented the Great Depression?. [Bennett T McCallum; National Bureau of Economic Research.] -- This paper continues an ongoing investigation of the properties of a specific, quantitative, and operational rule for the conduct of monetary policy, a rule that specifies settings of the monetary.

According to Hugh Rockoff, writing in January "If Great Depressions could be prevented through timely actions by the monetary authority (or by a monetary rule), as Friedman and Schwartz had.

By the s, I think it’s fair to say that the vast majority of economists had been convinced by Milton Friedman’s assertion that aggressive monetary policy could have prevented the Great Depression. Some of us started to have doubts after contemplating Japan’s troubles in the s; but as late as Ben Bernanke declared, on behalf.

McCallum, Bennett T.,Robustness properties of a rule for monetary policy, Carnegie- Rochester Conference Series on Public Policy McCallum, Bennett T.,Could a monetary base rule have prevented the great depression?, Journal of Monetary.

Could the Federal Reserve have reversed the decline in the money supply during the Great Depression without causing a loss of confidence in the U.S. commitment to the gold standard. This article uses the $1 billion expansionary open market operation in as a crucial case study.

"Could a monetary base rule have prevented the great depression?," Journal of Monetary Economics, Elsevier, vol. 26(1), pagesAugust. Bennett T. McCallum, 'The Monetary Policy of the Federal Reserve: A History by Robert Hetzel studies the evolution of monetary policy from the beginning of the Federal Reserve until the end of the Greenspan Era.

The title claims the book is a history, and it is that, but it is much more. Bennett T. McCallum (), 'Could a Monetary Base Rule have Prevented the Great Depression?' James S. Fackler and Randall E. Parker (), 'Accounting for the Great Depression: A Historical Decomposition' Stephen G.

Cecchetti (), 'Prices During the Great Depression: Was the Deflation of Really Anticipated?'   The Fed reduced the monetary base by about 7% between October and October in the pre-Fed era might have prevented the banking panic from spreading.

it mostly responsible for the. McCallum, B. (b) ‘Could a Monetary Base Rule Have Prevented the Great Depression?’, Journal of Monetary Economics, vol. 26 (August) pp. 13– CrossRef Google Scholar McCallum, B.

() ‘Specification and Analysis of a Monetary Policy Rule for Japan’, Bank of Japan Monetary and Economic Studies, vol. 11 (November), pp. 1– In their influential chapter 7, The Great Contraction--which Princeton published in as a separate paperback--they address the central economic event of the century, the Depression.

According to Hugh Rockoff, writing in January "If Great Depressions could be prevented through timely actions by the monetary authority (or by a monetary.

There is a great deal of academic research suggesting that monetary policy should use a rules-based approach (e.g., Kydland and Prescott, ; McCallum, ; Plosser, ).During the mids to the early s, monetary policy did seem to follow something close to the Taylor Rule. 1 This period also saw good macroeconomic outcomes, including low and stable inflation, as well as less.

Franklin Delano Roosevelt ("FDR") was the 32nd president of the United States from to   He was sworn into office at the height of the Great Depression and immediately worked to launch a series of programs and projects that came to be collectively known as the New Deal.

Years later, FDR brought the nation into World War II, and wartime military spending helped end the depression. Using either the monetary base or broader aggregates, there was significant inflation after the – depression.

Furthermore, we know that in the Fed deliberately adopted an "easy" policy with the aim of pushing down the very interest rate that governed stock speculation. In andhowever, the Federal Reserve doubled bank reserve requirements, leading to the short sharp recession of –38 within the longer period of the Great Depression.

The monetary. examine the book’s main theme—that discretionary monetary policy failed in the Great Depression (–), in the Great Inflation (–), and in the recent Great Recession (–)—and then consider its main conclusion—that monetary policy should be based on less discretion and more rule-like behavior.

& Elsevier B.V. The Taylor rule is one kind of targeting monetary policy used by central Taylor rule was proposed by the American economist John B. Taylor, economic adviser in the presidential administrations of Gerald Ford and George H.W. Bush, in as a central bank technique to stabilize economic activity by setting an interest rate.

The rule is based on three main indicators: the federal. “The asset purchase program has made the doubling of the monetary base very persistent, as well as very large.” In his speech, Bullard also discussed research that suggests the Great Depression and the Japanese slowdown could have been prevented had quantitative rules for monetary policy been in place during these periods.

50 percent” (Volume 1, p ). Meltzer shows that this decline could have been prevented, and carefully reviews the records looking for the most likely reason for that tragic mistake.

He concludes that a flawed view of how monetary policy works was the main problem.Could A Monetary Base Rule Have Prevented the Great Depression?

w Published: Journal of Monetary of Economics, Vol. 26, No. 1, pp.(). McCallum, Bennett T., "Could a monetary base rule have prevented the great depression?," Journal of Monetary Economics, Elsevier, vol.

26(1), pagesAugust. citation courtesy of. July The Great Depression was a worldwide catastrophe whose causes and consequences alike were global in character. "The primary cause of the Great Depression," reads the first sentence of President Herbert Hoover’s Memoirs, "was the war of –" And that so-called Great War, along with the Depression it spawned, was the driver that.