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Inflationary price stability and the Great Crash: an early analysis reconsidered

Research output: Contribution to Journal/MagazineJournal articlepeer-review

<mark>Journal publication date</mark>1/09/2011
<mark>Journal</mark>Cambridge Journal of Economics
Issue number5
Number of pages16
Pages (from-to)921-936
Publication StatusPublished
<mark>Original language</mark>English


The historical account of American economic conditions before the Great Crash in A. D. Gayer's Monetary Policy and Economic Stabilisation (1935A) reflects an inter-war debate over the consequences of a stable price level when underlying productivity is rising strongly. Its account evokes, in several ways, recent concern over the emergence of financial sector instability under inflation targeting regimes. A theoretical treatment of the main analysis permits both comparison between different perspectives in thinking at the time and a critical re-examination of the relevance of this thinking to modern policy dilemmas. Nominal targets may have destabilising real sector consequences.