A Great article

Please don´t miss this article on Monetary Policy and the Great Depression by Clark Johnson: Monetary policy and the great recession-Clark Johnson

Opening paragraph:

Once, years before the onset of the Great Depression, John Maynard Keynes offered a laundry list of things to which people attribute hard times – everything from structural factors to technological change to moral decline. But he then observed that the root of the problem was typically monetary. Keynes was prescient; while conventional wisdom sees it otherwise, the origins of the Great Recession of 2008-09 largely lie in monetary policy, as does the way back to prosperity.

Courtesy David Beckworth

(Note: It may take a while to open)

3 thoughts on “A Great article

    • Peter The key argument on that point is:”Such an agreement (2% interest rate) would help brake the Central Banks’ habit of using interest rates as their primary tool in fighting recessions”. I agree that that sort of agreement will be hard to make. The upside is that if the Fed acts “properly” and remains credible about its NGDP target, interest rates will move up on their “own volition”.

  1. Pingback: Clark Johnson has written what will become a Market Monetarist Classic « The Market Monetarist

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