Hansen and the New Deal Policies

Robert Bigg

A chapter in Alvin Hansen, 2023, pp 81-102 from Palgrave Macmillan

Abstract: Abstract In 1931, Hansen had seen the post-war maldistribution of gold as a major factor behind the depression. Counterfactually, without the drain of gold into France and the USA, the decline in world prices would have been gradual rather than precipitous. At the Chicago Harris Foundation meetings in both 1931 and 1932, Hansen remained sceptical about the efficacy of public works. Later, he characterised the mid-1930s recovery as being consumption-led. Whilst investment had increased, this had followed the rise in consumption. A full recovery had failed to materialise not because of capital shortage but due to a failure to develop adequate investment outlets. In retrospect, considering the depth of the recession, the New Deal had been a success, albeit that it could have been better if Congress had been bolder.

Keywords: Alvin Hansen; American Keynesianism; Business cycle; Cost-price structure; Equilibrium; Fiscal & monetary policy; Gold standard; Great depression; Laissez-faire; Public works; Savings & investment; Stagnation; Temporary National Economic Committee (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:pal:gtechp:978-3-031-42216-4_5

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DOI: 10.1007/978-3-031-42216-4_5

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