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Keynes, purchasing power parity and exchange rate policy in New Zealand during the 1930s depression

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  • Grant Fleming

Abstract

This paper examines the intellectual pedigree of New Zealand economists' ideas on exchange rate policy up to and during the 1930s Depression. In 1930, most economists argued that devaluation should not be an integral part of a depression policy package. By the time of the 1932 Economic Committee, however, devaluation was seen by almost every economist as necessary to bring about relative cost readjustment. It is argued that the consensus amongst economists was due to several factors: the transmission (through Copland) of Keynes's open economy precepts and the demonstration that the exchange rate has deviated permanently from its earlier purchasing power parity rate.

Suggested Citation

  • Grant Fleming, 1997. "Keynes, purchasing power parity and exchange rate policy in New Zealand during the 1930s depression," New Zealand Economic Papers, Taylor & Francis Journals, vol. 31(1), pages 1-14.
    • Handle: RePEc:taf:nzecpp:v:31:y:1997:i:1:p:1-14
    DOI: 10.1080/00779959709544262
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    1. Eichengreen, Barry, 1996. "Golden Fetters: The Gold Standard and the Great Depression, 1919-1939," OUP Catalogue, Oxford University Press, number 9780195101133.
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    1. Martin Ellison & Sang Seok Lee & Kevin Hjortshøj O'Rourke, 2024. "The Ends of 27 Big Depressions," American Economic Review, American Economic Association, vol. 114(1), pages 134-168, January.
    2. Geoffrey T. F Brooke & Anthony M. Endres & Alan J. Rogers, 2015. "Does New Zealand Economics Have a Useful Past? The Example of Trade Policy and Economic Development," Working Papers 2015-08, Auckland University of Technology, Department of Economics.
    3. Martin Ellison & Sang Seok Lee & Kevin Hjortshøj O’Rourke, 2020. "The Ends of 30 Big Depressions," Economics Series Working Papers 896, University of Oxford, Department of Economics.
    4. Geoffrey Brooke & Anthony Endres & Alan Rogers, 2018. "The Economists and Monetary Thought in Interwar New Zealand: The Gradual Emergence of Monetary Policy Activism," Working Papers 2018-09, Auckland University of Technology, Department of Economics.

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