Ricardo versus Thornton on the appropriate monetary response to supply shocks

Thomas M. Humphrey

Economic Review, 1990, vol. 76, issue Nov, 18-24

Abstract: David Ricardo (1772-1823) recommended countering supply shocks with monetary contraction. Henry Thornton (1760-1815) advised a constant-money response. Their views hinged (1) on the neutrality or non-neutrality of money-stock changes on real output and employment and (2) on the costs of inflation. These same considerations influence Federal Reserve policy in response to oil shocks today.

Keywords: Economists; Monetary theory (search for similar items in EconPapers)
Date: 1990
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