TY - JOUR

T1 - Inflationary price stability and the Great Crash

T2 - an early analysis reconsidered

AU - Snowden, N.

PY - 2011/9/1

Y1 - 2011/9/1

N2 - 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.

AB - 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.

KW - Great crash

KW - Aggregate demand

U2 - 10.1093/cje/beq050

DO - 10.1093/cje/beq050

M3 - Journal article

VL - 35

SP - 921

EP - 936

JO - Cambridge Journal of Economics

JF - Cambridge Journal of Economics

SN - 0309-166X

IS - 5

ER -