and so comes hawtrey

The Hawtrey v Keynes debate leading into the great depression
Ends where it ought to start

Hawtrey and Keynes moving apart rapidly
over methods or remedy

That a second tier sort like H gets pushed
forward today
as a mind for our time
Suggests just how deeply " the monetary first " caucus
Has come to occupy
 the front bench of  the macro activist party

What a misfortune for the job class

back to that vintage  debate

setting:
The long post great war pre great depression stag economy of Britain

Unemployeds at levels much like here and now


H blames the interest rate
K does not question that
But sez "can't be helped "
not If the gold pledge is to be defended


Of course the gold pledge ended up going up the spout
with the on set of great depression conditions


but reviving this debate seems to imply
we as they...keyes and hawtrey
 share a  notion of price level dynamics in the abstract
In a uniform currency closed system

But then emerges
a vaguely conflicting view of the interactions of various national price levels
all Sharing a gold pledge


H suggests you let gold flow out
In expectation of reactive acceleration of ROW credit expansion
And consequently
  a faster ROW price level rise

But then there's the tendency among central bankers ever vigilant to preserve price stability
to counter gold  in flows with a sterilization eh ?

H in the up shot
Simply asserts the best possible ROW reaction for britain
  an outflow of British gold might ...might produce:

a large  ROW credit expansion

and something quite like this  would be the necessary reaction

but
When it's only a possible reaction......

and
An examination of the historic record suggests
The likely hood in a time like the late twenties
When hawtrey is pushing  this line
The outcome might well be
" sterilization "
  by ROW central bank gold in takers

with this drain of gold into invisible coffers
Culminating in a payments  crisis in Britain

as we know and Fortunately

 the events of 29 and 30 obviated all this
And we got the final death rattle of the full force global gold standard

...

As a fiscal first and always guy
Hawtrey looks to yours truly
like a compassionate conservative dud

nicely Willing to venture the reputation of " London"
On a low rate of interest
That undoubtedly would induce an out rush of gold
Because he  mr Haetrey
  is "quite certain"
a ROW reaction that was unlikely
Under the circumstances and given the ROW CBs mind sets
will come to pass never the less
and resurrect  industrious Albion

yipes what faith
And All just to stimulate domestic private investment
doubling down on  that sticky channel
                     to   increase employment ?


What a sap

i think of our quant ease cheer leaders

more Quant ease anyone ?

------------------------------------------------

 

I hasten belatedly to add:
The tacit closed system model
shared by K and H in the late 20's
Was profoundly wrong

And it's precisely keynes-kalecki's
macro theory revolution
That got at this over arching
and  catastrophicaly aweful  irreality
so firmly lodge  in the mnds of the best and brightest policy makers


hell
Even Keynes was operating without a good model in the late 20's

he sallied forth armed with "Only " a keen sense
The shared model of both HE and  Hawtrey (and the central banksters)
Was  wildly  "cocked" ....as we Boston Irish say


Here's Keynes appealing to realities of the gold standard
to counter Hawtrey

while he himself was still not really solidly sold
 on his public works gig


"After all there's the debt build up u know "

and perhaps  " some  crowding out "!