Federal Reserve policy and the recession of 1937-1938: let's not ignore Telser's analysis

Robert F. Stauffer

Journal of Post Keynesian Economics, 2010, vol. 32, issue 4, 591-600

Abstract: Despite compelling arguments by Lester Telser, the myth continues that the recession of 1937-38 was caused by the Federal Reserve's three increases in reserve requirements from 1936 to 1937. Telser argued that banks were able to significantly increase lending prior to the recession by using asset substitutionânamely, switching from government securities to loans. This analysis reinforces Telser's position by comparing the behavior of member banks, which were subject to reserve requirement increases, to the behavior of nonmember banks, which were not constrained by such increases.

Keywords: Great Depression; monetary policy; reserve requirements (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations:

Downloads: (external link)
http://mesharpe.metapress.com/link.asp?target=contribution&id=M367162676827P36 (text/html)
Access to full text is restricted to subscribers.

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:mes:postke:v:32:y:2010:i:4:p:591-600

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MPKE20

Access Statistics for this article

More articles in Journal of Post Keynesian Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().