Izabella Kaminska — A time of hoarding and inflation fears, 1930s edition

History repeats or just rhymes?

The Financial Times | FTAlphaville
A time of hoarding and inflation fears, 1930s edition
Posted by Izabella Kaminska

(h/t Andy Blatchford)

13) From, Inflation and deflation — February 22, 1932 (Izzy — a.k.a. employment targeting Version 1):

"In times of depression, when equipment is largely idle and much labor is unemployed, expansion of credit which may effectively stimulate prices, and thus bring about increased employment of equipment and labor with a corresponding enlargement of output is to be regarded as normal and healthy. Such expansion should be called “inflation”. Expansion becomes “overexpansion” or “inflation” when it tends to carry prices beyond the level at which the maximum output is insured through reasonably full employment of available equipment and labor. Similarly, contraction becomes excessive when it forces a lowering of prices below the level of maximum output and leads to shut-downs and unemployment. In short, that level of prices is to be regarded as 'normal' which brings about maximum output through full employment of equipment and labor, and it is from this level that credit movements, in so far as they may be considered responsible should be judged."