Book contents
- A Great Deal of Ruin
- A Great Deal of Ruin
- Copyright page
- Contents
- Tables
- Preface
- I Introduction
- Part I Financial Crises
- Part II Five Case Studies
- Part III Lessons
- 8 Markets Do Not Self-Regulate
- 9 Shadow Banks are Banks
- 10 Banks Need More Capital, Less Debt
- 11 Monetary Policy Does Not Always Work
- 12 Fiscal Multipliers Are Larger Than Expected
- 13 Monetary Integration Requires Fiscal Integration
- 14 Open Capital Markets Can Be Dangerous
- 15 Not All Debt Is Created Equal
- Conclusion
- Abbreviations and Acronyms
- Bibliography
- Index
12 - Fiscal Multipliers Are Larger Than Expected
from Part III - Lessons
Published online by Cambridge University Press: 05 August 2019
- A Great Deal of Ruin
- A Great Deal of Ruin
- Copyright page
- Contents
- Tables
- Preface
- I Introduction
- Part I Financial Crises
- Part II Five Case Studies
- Part III Lessons
- 8 Markets Do Not Self-Regulate
- 9 Shadow Banks are Banks
- 10 Banks Need More Capital, Less Debt
- 11 Monetary Policy Does Not Always Work
- 12 Fiscal Multipliers Are Larger Than Expected
- 13 Monetary Integration Requires Fiscal Integration
- 14 Open Capital Markets Can Be Dangerous
- 15 Not All Debt Is Created Equal
- Conclusion
- Abbreviations and Acronyms
- Bibliography
- Index
Summary
As the United States descended into the Great Depression of the 1930s, economic advice was contradictory and confused. The business community, politicians, and academics called for a variety of different policies: Some wanted government to do nothing, believing that there was not much that government could do, that recessions had to work their way through the economic system, like a poison that has no antidote; others thought government should encourage firms to invest, that they should be allowed to form cartels to control prices and wages and output; and still others favored public works that would put the unemployed back to work. To a large degree, Roosevelt was more successful than Hoover because he kept trying one thing after another. He did not have a comprehensive economic model, or even much of any kind of model, but focused on humanitarian relief as something government could do even if it did not understand how to systematically counter the recession. At least government could aid those who lost their jobs, their homes, and their farms. Roosevelt did not end the Great Depression and we now know that many of his policies and those of his contemporaries were counterproductive and prolonged the recession.
- Type
- Chapter
- Information
- A Great Deal of RuinFinancial Crises since 1929, pp. 237 - 251Publisher: Cambridge University PressPrint publication year: 2019