Macroeconomic policymaking in interwar Britain
A reappraisal
Bibliographic Data
| ID | 3344609 |
|---|---|
| Authors | David Ronicle (0009-0002-9994-9293, International Directorate, Bank of England, corresponding author) |
| Year | 2025 |
| Volume | 79 |
| Issue | 2 |
| Pages | 661-683 |
| Publication date | 2025-07-03 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic History Review (JOURNAL) |
| Journal identifiers | ISSN: 0013-0117 • E-ISSN: 1468-0289 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1111/ehr.70018 |
| OpenAlex | W4412014054 |
| Language | EN |
| References cited | 41 |
This paper brings together modern empirical techniques with contemporary high frequency data to fill two prominent gaps in the literature on Britain's interwar years: what were the quantitative effects of monetary policy on unemployment and prices in the years 1919-38, and how did that compare with the effects of fiscal policy? Its specific innovation is to draw on a previously little-used weekly publication of public finance statistics, allowing the roles of monetary policy, taxation, and public spending to be assessed side-by-side in a coherent framework - a structural vector autoregression identified with sign restrictions. In a period of particularly unsettled policy, I find that policy shocks, both monetary and fiscal, made a material contribution to variation in prices and unemployment and played a central role in the two great recessions of the period, modern Britain's most severe. Other macroeconomic policy choices could have delivered better outcomes for prices and unemployment, but this would have required making different choices in the face of conflicting objectives and some sharp trade-offs
Economic history · Economics · Interwar period · Keynesian economics · Political economy · Political science · World War II · Economic Theory and Policy · Historical Economic and Social Studies · Law · Political and Economic history of UK and US
Structural Vector Autoregressive Analysis
An Empirical Characterization of the Dynamic Effects of Changes in Government Spending and Taxes on Output
What are the effects of fiscal policy shocks?
A New Measure of Monetary Shocks
Monetary Policy Surprises, Credit Costs, and Economic Activity
The Macroeconomic Effects of Tax Changes
British historical statistics
Britain and Globalisation Since 1850
London Merchant Banks, the Central European Panic, and the Sterling Crisis of 1931
Prices in Interwar Britain
Monthly GDP estimates for inter-war Britain
Did monetary policy matter? Narrative evidence from the classical gold standard
The prelude and global impact of the Great Depression
Bank Rate Policy Under the Interwar Gold Standard
Domestic Monetary Management in Britain, 1919-38
British Monetary Policy 1924-1931
Identifying Government Spending Shocks
Rearmament to the Rescue? New Estimates of the Impact of "Keynesian" Policies in 1930s' Britain
Effective Exchange Rates in Britain, 1920-1930
Uncertainty and the Great Slump
Measuring inflation expectations in interwar Britain
The Finance of British Government, 1920-36
The Constant Employment Budget Balance and British Budgetary Policy, 1929-391
The Inter-War British Economy
| Citation velocity | historical |
|---|---|
| Highly cited | No |