How was the Quantitative Easing Program of the 1930s Unwound? / Matthew Jaremski, Gabriel Mathy.

Format:

Book

Author/Creator:

Jaremski, Matthew.

Contributor:

National Bureau of Economic Research.

Mathy, Gabriel.

Series:

Working Paper Series (National Bureau of Economic Research) no. w23788.

NBER working paper series no. w23788

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2017.

Summary:

Outside of the recent past, excess reserves have only concerned policymakers in one other period: the Great Depression. The data show that excess reserves in the 1930s were never actively unwound through a reduction in the monetary base. Nominal economic growth swelled required reserves while an exogenous reduction in monetary gold inflows due to war embargoes in Europe allowed excess reserves to naturally decline towards zero. Excess reserves fell rapidly in early 1941 and would have unwound fully even without the entry of the United States into World War II. As such, policy tightening was at no point necessary and could have contributed to the 1937-1938 Recession.

Notes:

Print version record

September 2017.