IDEAS home Printed from https://ideas.repec.org/p/fip/fedrwp/03-13.html
   My bibliography  Save this paper

Classical deflation theory

Author

Listed:
  • Thomas M. Humphrey

Abstract

Classical economists David Hume, Pehr Niclas Christiernin, Henry Thornton, David Ricardo, Thomas Attwood, and Robert Torrens looked beyond the redistributive (creditor-debtor) effects of deflationary monetary contraction to its adverse effects on output and employment. They attributed these effects to price-wage stickiness; to rises in real debt, tax, and cost burdens; to cash hoarding in anticipation of future price falls; and to other determinants. Addressing deflation associated with post-war resumption of gold convertibility at the old mint par, they advocated policies ranging from gradualism, to devaluation, and even to outright abandonment of the gold standard in order to avoid or mitigate deflation?s harm.

Suggested Citation

  • Thomas M. Humphrey, 2003. "Classical deflation theory," Working Paper 03-13, Federal Reserve Bank of Richmond.
    • Handle: RePEc:fip:fedrwp:03-13
    as

    Download full text from publisher

    File URL: http://www.richmondfed.org/publications/research/working_papers/2003/wp_03-13.cfm
    Download Restriction: no
    File URL: https://www.richmondfed.org/-/media/RichmondFedOrg/publications/research/working_papers/2003/pdf/wp03-13.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Cesarano, Filippo, 1983. "The Rational Expectations Hypothesis in Retrospect," American Economic Review, American Economic Association, vol. 73(1), pages 198-203, March.
    2. Cesarano, Filippo, 1998. "Hume's specie-flow mechanism and classical monetary theory: An alternative interpretation," Journal of International Economics, Elsevier, vol. 45(1), pages 173-186, June.
    3. Thomas M. Humphrey, 1982. "Of Hume, Thornton, the quantity theory, and the Phillips curve," Economic Review, Federal Reserve Bank of Richmond, vol. 68(Nov), pages 13-18.
    4. Hicks, J. R., 1979. "Critical Essays in Monetary Theory," OUP Catalogue, Oxford University Press, number 9780198284239.
    5. Laidler,David, 1999. "Fabricating the Keynesian Revolution," Cambridge Books, Cambridge University Press, number 9780521641739, September.
    6. David Laidler, 2000. "Highlights of the Bullionist Controversy," University of Western Ontario, Departmental Research Report Series 20002, University of Western Ontario, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Goetz von Peter, 2005. "Debt-Deflation: Concepts, and a Stylised Model," Macroeconomics 0505001, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thomas M. Humphrey, 2004. "Classical deflation theory," Economic Quarterly, Federal Reserve Bank of Richmond, vol. 90(Win), pages 11-32.
    2. Mauro Boianovsky, 2004. "The IS-LM Model and the Liquidity Trap Concept: From Hicks to Krugman," History of Political Economy, Duke University Press, vol. 36(5), pages 92-126, Supplemen.
    3. Agnès Festré, 2002. "Money, Banking and Dynamics: Two Wicksellian Routes from Mises to Hayek and Schumpeter," American Journal of Economics and Sociology, Wiley Blackwell, vol. 61(2), pages 439-480, April.
    4. Arie Arnon, 2007. "The Early Round Of The Bullionist Debate 1800-1802: Boyd, Baring And Thornton’S Innovative Ideas," Working Papers 0714, Ben-Gurion University of the Negev, Department of Economics.
    5. Borio, Claudio, 2013. "On Time, Stocks and Flows: Understanding the Global Macroeconomic Challenges," National Institute Economic Review, National Institute of Economic and Social Research, vol. 225, pages 3-13, August.
    6. V. Ragupathy & Stefano Zambelli & K. Vela Velupillai, 2013. "A Non-linear Model of the Trade Cycle: Mathematical Reflections on Hugh Hudson's Classic," Australian Economic Papers, Wiley Blackwell, vol. 52(2), pages 115-125, June.
    7. Lars Jonung, 2002. "EMU and the Euro - The First Ten Years. Challenges to the sustainability and price stability of the euro area - what does history tell us?," EUI-RSCAS Working Papers 46, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    8. Ramesh Chandra & Roger J. Sandilands, 2021. "Nicholas Kaldor, increasing returns and Verdoorn’s Law," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 44(2), pages 315-339, April.
    9. Charles van Marrewijk, 2004. "An introduction to international money and foreign exchange markets," International Finance 0410006, University Library of Munich, Germany.
    10. Coenen Günter & Orphanides Athanasios & Wieland Volker, 2004. "Price Stability and Monetary Policy Effectiveness when Nominal Interest Rates are Bounded at Zero," The B.E. Journal of Macroeconomics, De Gruyter, vol. 4(1), pages 1-25, February.
    11. Béraud, Alain, 2003. "Keynes et Pigou sur le salaire monétaire et l’emploi : une synthèse du débat," L'Actualité Economique, Société Canadienne de Science Economique, vol. 79(1), pages 147-162, Mars-Juin.
    12. Buiter, Willem, 2007. "Is Numérairology the Future of Monetary Economics? Unbundling Numéraire and Medium of Exchange Through a Virtual Currency and," CEPR Discussion Papers 6099, C.E.P.R. Discussion Papers.
    13. Jesús Cuaresma & Ernest Gnan, 2007. "The natural rate of interest: which concept? which estimation method? which policy conclusions?," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 29(4), pages 667-688.
    14. Robert W. Dimand, 2012. "The Roots of the Present are in the Past: The Relation of Postwar Developments in Macroeconomics to Interwar Business Cycle and Monetary Theory," Chapters, in: Thomas Cate (ed.), Keynes’s General Theory, chapter 5, Edward Elgar Publishing.
    15. Joshua R. Hendrickson, 2018. "The Bullionist Controversy: Theory and New Evidence," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 50(1), pages 203-241, February.
    16. Siven, Claes-Henric, 2000. "Analytical Foundations of Erik Lindahl's Monetary Analysis, 1924-30," Research Papers in Economics 2000:14, Stockholm University, Department of Economics.
    17. Roger E. Backhouse & Bradley W. Bateman, 2009. "Keynes and Capitalism," History of Political Economy, Duke University Press, vol. 41(4), pages 645-671, Winter.
    18. Thomas M. Humphrey, 2000. "Monetary policy frameworks and indicators for the Federal Reserve in the 1920s," Working Paper 00-07, Federal Reserve Bank of Richmond.
    19. Alexander Tobón Arias, 2004. "La crítica de Hicks al Tratado del Dinero de Keynes," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 61, pages 121-130, Julio-Dic.
    20. Haavio, Markus & Mendicino, Caterina & Punzi, Maria Teresa, 2013. "Financial and economic downturns in OECD countries," Bank of Finland Research Discussion Papers 35/2013, Bank of Finland.

    More about this item

    Keywords

    Monetary theory; Employment; Labor productivity;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedrwp:03-13. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christian Pascasio (email available below). General contact details of provider: https://edirc.repec.org/data/frbrius.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.