The "Riefler-Keynes" Doctrine and Federal Reserve Policy in the Great Depression

Judge Glock

History of Political Economy, 2019, vol. 51, issue 2, 297-327

Abstract: Histories of the Federal Reserve have argued that up through the Great Depression it adhered to a “real bills†or “Riefler Burgess†conception of monetary policy, which caused it to focus on short-term borrowing as an indicator of the stance of monetary policy. This article argues that new institutionalist monetary theories had a substantial influence on the Federal Reserve from the beginning of the Depression and pushed the Federal Reserve to focus on reducing interest rates on long-term assets and encouraging bank investments in such assets. This article will show how these ideas caused the Federal Reserve to ignore other indicators of the tightness of monetary policy.

Keywords: Great Depression; Real Bills Doctrine; institutionalists; John Maynard Keynes; Federal Reserve; liquidity (search for similar items in EconPapers)
Date: 2019
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