A Newly Revised Version of My Paper (with Ron Batchelder) on Hawtrey and Cassel Is Now Available on SSRN

This may not be the most important news of the day, but for those wishing to immerse themselves in the economics of Hawtrey and Cassel, a newly revised version of my paper with Ron Batchelder “Pre-Keynesian Monetary Explanations of the Great Depression: Whatever Happened to Hawtrey and Cassel?” is now available on SSRN.

The paper has also recently been submitted to a journal for review, so we are hoping that it will finally be published before too long. Wish us luck. Here’s the slightly revised abstract.

A strictly monetary theory of the Great Depression is generally thought to have originated with Milton Friedman. Designed to counter the Keynesian notion that the Depression resulted from instabilities inherent in modern capitalist economies, Friedman’s explanation identified the culprit as an ill-conceived monetary policy pursued by an inept Federal Reserve Board. More recent work on the Depression suggests that the causes of the Depression, rooted in the attempt to restore an international gold standard that had been suspended after World War I started, were more international in scope than Friedman believed. We document that current views about the causes of the Depression were anticipated in the 1920s by Ralph Hawtrey and Gustav Cassel who independently warned that restoring the gold standard risked causing a disastrous deflation unless the resulting increase in the international monetary demand for gold could be limited. Although their early warnings of potential disaster were validated, and their policy advice after the Depression started was consistently correct, their contributions were later ignored or forgotten. This paper explores the possible reasons for the remarkable disregard by later economists of the Hawtrey-Cassel monetary explanation of the Great Depression.

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6 Responses to “A Newly Revised Version of My Paper (with Ron Batchelder) on Hawtrey and Cassel Is Now Available on SSRN”


  1. 1 Marcus Nunes May 7, 2013 at 1:49 pm

    David: “…their contributions were later ignored or forgotten. This paper explores the possible reasons for the remarkable disregard by later economists of the Hawtrey-Cassel monetary explanation of the Great Depression.” People only want to remember when they were right! And appear stupid enough not to heed a long ago lesson and maybe sell it at present as their ‘own creation’.

  2. 2 nottrampis May 9, 2013 at 3:28 pm

    I am enjoying reading all this so keep it up David.

    Hopefully more people from OZ will gain a free education as well.

    By the way I love Brad De Long’s suggestion!

  3. 3 Rob Rawlings May 9, 2013 at 3:50 pm

    This may or may not have been the most important news of the day but I certainly enjoyed reading this paper.

    You have demonstrated that on the important issues of the day Hawtrey’s thinking was sound. I think however his views were too pragmatic and eclectic (and perhaps complex) to be expressed in the kind of soundbites that can be used for Keynes, Hayek and Friedman and this has meant that he remains less well known outside the economics profession than those other thinkers.

    Undoubtedly your blog and the posts that you have done on Hawtrey are starting to address this and get him a greater degree of recognition for his work.

  4. 4 Blue Aurora May 15, 2013 at 1:41 am

    Excellent. I was looking forward to this article’s publication, given how similar articles on anticipations of causes for the Great Depression have been published, like this article on Foster and Catchings.

    http://onlinelibrary.wiley.com/doi/10.1111/j.1538-4616.2010.00386.x/abstract

    However, we’ve talked about your paper on Hawtrey and Cassel through e-mail correspondence, David Glasner. Specifically, I asked about Hawtrey and Cassel’s relationship with each other. Didn’t you say that you were going to cite an old article by Susan Howson? Why has that reference been removed?

    Lastly, where did you send your revised Hawtrey/Cassel paper to? The Journal of Political Economy? Or the Journal of the History of Economic Thought? Or somewhere else, like History of Economic Thought and Policy, or History of Economic Ideas, or the History of Economics Review?

  5. 5 David Glasner May 18, 2013 at 9:51 pm

    Marcus, Did you mean to say “And _don’t_ appear stupid enough?”

    nottrampis, Hope to keep you as a satisfied customer.

    Rob, I’m glad that you enjoyed it. Unfortunately, Hawtrey (can Cassel) are no longer well known names even within the economics profession.

    Blue Aurora, Thanks for the link, I hope to read it soon. Hawtrey and Cassel were well aware of each other’s work, and they were both closely involved with the 1922 Genoa Conference. If the reference to the Howson paper was removed, it was most probably done so inadvertently and will likely be restored. It was sent to JPE.


  1. 1 Krugman´s bias | Historinhas Trackback on May 7, 2013 at 3:39 pm

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About Me

David Glasner
Washington, DC

I am an economist at the Federal Trade Commission. Nothing that you read on this blog necessarily reflects the views of the FTC or the individual commissioners. Although I work at the FTC as an antitrust economist, most of my research and writing has been on monetary economics and policy and the history of monetary theory. In my book Free Banking and Monetary Reform, I argued for a non-Monetarist non-Keynesian approach to monetary policy, based on a theory of a competitive supply of money. Over the years, I have become increasingly impressed by the similarities between my approach and that of R. G. Hawtrey and hope to bring Hawtrey's unduly neglected contributions to the attention of a wider audience.

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