Was the Federal Reserve Constrained by the Gold Standard During the Great Depression? Evidence from the 1932 Open Market Purchase Program

Chang-Tai Hsieh and Christina Romer

The Journal of Economic History, 2006, vol. 66, issue 1, 140-176

Abstract: Could the Federal Reserve have reversed the decline in the money supply during the Great Depression without causing a loss of confidence in the U.S. commitment to the gold standard? This article uses the $1 billion expansionary open market operation in 1932 as a crucial case study. Using forward exchange rates and interest rate differentials to measure devaluation expectations, we find virtually no evidence that the large monetary expansion led investors to believe that the United States would devalue. The financial press and Federal Reserve records also show scant evidence of expectations of devaluation or fear of speculative attack.

Date: 2006
References: Add references at CitEc
Citations: View citations in EconPapers (36)

Downloads: (external link)
https://www.cambridge.org/core/product/identifier/ ... type/journal_article link to article abstract page (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cup:jechis:v:66:y:2006:i:01:p:140-176_00

Access Statistics for this article

More articles in The Journal of Economic History from Cambridge University Press Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK.
Bibliographic data for series maintained by Kirk Stebbing ().