2-1-13
Evan A. Schnidman: When Will the U.S. Hit The 1947 Wall?
Roundup: Historians' Taketags: economic history, inflation, 1947, Evan A. Schnidman
Evan A. Schnidman is a Ph.D. candidate at Harvard University studying how politics and finance play a role in central-bank decision making. He is also the founder and primary author of FedPlaybook.com, a central bank forecasting and analysis resource for investors.
After a decade of financial struggle and a severe crisis in Europe that caused a massive ripple effect around the world, the United States found itself engaging in unprecedentedly loose monetary policy to finance public debt. You might have guessed I was describing the economy at the start of 2013, but despite financial prognostications that 2013 will be a good year for the U.S. economy, the parallels between the U.S. economy in 1947 and in 2013 are quite stark.
The history
During and immediately after World War II, the Fed maintained extremely low interest rates in order to reduce war-financing costs for the government. As these policies became unnecessary and inflationary after the war, the Fed was compelled by the Treasury to maintain the low cost of debt. The result of this highly accommodating monetary policy was 14 percent inflation in 1947 and rising unemployment that persisted into the early 1950s....
comments powered by Disqus
News
- The Debt Ceiling Law is now a Tool of Partisan Political Power; Abolish It
- Amitai Etzioni, Theorist of Communitarianism, Dies at 94
- Kagan, Sotomayor Join SCOTUS Cons in Sticking it to Unions
- New Evidence: Rehnquist Pretty Much OK with Plessy v. Ferguson
- Ohio Unions Link Academic Freedom and the Freedom to Strike
- First Round of Obama Administration Oral Histories Focus on Political Fault Lines and Policy Tradeoffs
- The Tulsa Race Massacre was an Attack on Black People; Rebuilding Policies were an Attack on Black Wealth
- British Universities are Researching Ties to Slavery. Conservative Alumni Say "Enough"
- Martha Hodes Reconstructs Her Memory of a 1970 Hijacking
- Jeremi Suri: Texas Higher Ed Conflict "Doesn't Have to Be This Way"
Trending Now
- New transcript of Ayn Rand at West Point in 1974 shows she claimed “savage" Indians had no right to live here just because they were born here
- The Mexican War Suggests Ukraine May End Up Conceding Crimea. World War I Suggests the Price May Be Tragic if it Doesn't
- The Vietnam War Crimes You Never Heard Of