Keynes on the Sequencing of Economic Policy: Recovery and Reform in 1933

Sebastian Edwards

No 24367, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: On December 31 1933, The New York Times published an open letter from John Maynard Keynes to President Franklin D. Roosevelt. In it Keynes encouraged FDR to expand public works through government borrowing. He also criticized FDR’s exchange rate policy, and argued that there was a need for lower long-term interest rates. But perhaps the most interesting feature of this letter is that Keynes made comments on the sequencing and speed of economic policies. He argued that “recovery” policies should precede “reform” measures. In this paper I analyze this particular aspect of the open letter, and I argue that for Keynes exchange rate stability was a key component of what he considered to be the appropriate order of policy. I also provide a comparison between Keynes’s views on sequencing and those developed in the 1980s and 1990s.

JEL-codes: B21 B22 B26 B27 E31 F31 N12 N22 (search for similar items in EconPapers)
Date: 2018-03
New Economics Papers: this item is included in nep-his, nep-hpe, nep-mac and nep-pke
Note: DAE IFM ME
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Citations: View citations in EconPapers (1)

Published as Sebastian Edwards, 2017. "Keynes on the Sequencing of Economic Policy: Recovery and Reform in 1933," History of Economics Review, vol 68(1), pages 17-34.

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