Could Stable Money Have Averted The Great Contraction? / Michael D. Bordo, Ehsan U. Choudhri, Anna J. Schwartz.

Format:

Book

Author/Creator:

Bordo, Michael D.

Contributor:

National Bureau of Economic Research.

Choudhri, Ehsan U.

Schwartz, Anna J.

Series:

Working Paper Series (National Bureau of Economic Research) no. w4481.

NBER working paper series no. w4481

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1993.

Summary:

We test the hypothesis that the Great Contraction would have been attenuated had the Fed not allowed the money stock to decline. We do so by simulating a model that estimates separate relations for output and the price level and assumes that output and price dynamics are not especially sensitive to policy changes. The simulations include a strong and a weak form of Friedman's constant money growth rule. The results support the hypothesis that the Great Contraction would have been mitigated and shortened had the Fed followed a constant money growth rule.

Notes:

Print version record

October 1993.