This paper examines the effects of the financial crisis of the 1930s onthe path of aggregate output during that period. Our approach is complementary to that of Friedman and Schwartz, who emphasized the monetary impact of the bank failures; we focus on non-monetary (primarily credit-related) aspects of the financial sector--output link and consider the problems of debtors as well as those of the banking system. We argue that the financial disruptions of 1930-33 reduced the efficiency of the credit allocation process; and that the resulting higher cost and reduced availability of credit acted to depress aggregate demand. Evidence suggests that effects of this type can help explain the unusual length and depth of the Great Depression.

Non-Monetary Effects of the Financial Crisis in the Propagation of the Great Depression

Nonmonetary Effects of the Financial Crisis in Propagation of the Great Depression

Social constructivism in international relations has come into its own during the past decade, not only as a metatheoretical critique of currently dominant neo-utilitarian approaches (neo-realism and neoliberal institutionalism) but increasingly in the form of detailed empirical findings and theoretical insights. Constructivism addresses many of the same issues addressed by neo-utilitarianism, though from a different vantage and, therefore, with different effect. It also concerns itself with issues that neo-utilitarianism treats by assumption, discounts, ignores, or simply cannot apprehend within its characteristic ontology and/or epistemology. The constructivist project has sought to open up the relatively narrow theoretical confines of conventional approaches—by pushing them back to problematize the interests and identities of actors; deeper to incorporate the intersubjective bases of social action and social order; and into the dimensions of space and time to establish international structure as contingent practice, constraining social action but also being (re)created and, therefore, potentially transformed by it.

https://www.jstor.org/stable/pdfplus/2601360.pdf

What Makes the World Hang Together? Neo-utilitarianism and the Social Constructivist Challenge

The structure of international trade, identified by the degree of openness for the movement of goods, can best be explained by a state-power theory of international political economy. This theory begins with the assumption that the nature of international economic movements is determined by states acting to maximize national goals. Four goals—aggregate national income, political power, social stability, and economic growth—can be systematically related to the degree of openness in the international trading system for states of different relative sizes and levels of development. This analysis leads to the conclusion that openness is most likely to exist when there is a hegemonic distribution of potential economic power. Time-series data on tariff levels, trade proportions, regional concentration, per capita income, national income, share of world trade, and share of world investment are then presented. The first three are used to describe the degree of openness in the trading system; the last four, the distribution of state power. The data suggest that the state-power theory should be amended to take into consideration domestic political constraints on state action.

https://www.cambridge.org/core/services/aop-cambridge-core/content/view/S0043887100021055

State Power and the Structure of International Trade

In 1989, peaceful change, which a leading realist theorist had declared a very low-probability event in international politics less than a decade before, accommodated the most fundamental geopolitical shift of the postwar era and perhaps of the entire twentieth century: the collapse of the Soviet East European empire and the attendant end of the cold war. Many factors were responsible for that shift. But there seems little doubt that multilateral norms and institutions have helped stabilize their international consequences. Indeed, such norms and institutions appear to be playing a significant role in the management of a broad array of regional and global changes in the world system today.

https://www.cambridge.org/core/services/aop-cambridge-core/content/view/S0020818300027831

Multilateralism: the anatomy of an institution

THIS PAPER DEVELOPS some diverse hints for a new monetary system offered separately by Fischer Black, Eugene Fama, and Robert E. Hall. (For reasons that will become evident, though, we should perhaps say "payments system" instead of monetary system.) None of the economists mentioned has actually proposed the particular system set forth here nor examined all its properties, and we call it the "BFH system" not to implicate them but only to give credit for some component ideas and to have a convenient label.l Regardless of who if anyone may actually advocate the system, contemplating it is instructive. It illuminates, by contrast, some characteristics of our existing and recent systems.

A Laissez-Faire Approach to Monetary Stability

International monetary relations: Theory, history, and policy

Professor Sherwin Rosen correctly suggests that the Austrian and neoclassical schools can be complementary, each accepting much from the other. However his recognition of Austrian strengths needs to be amplified and his criticisms need softening. His appeal to the market test risks encouraging anti-intellectual attitudes and practices

https://www.aeaweb.org/articles/pdf/doi/10.1257/jep.11.4.153

Austrian Economics, Neoclassicism, and the Market Test

In search of a monetary constitution

ed from the existence of contemporaneously available monetary data. Barro himself was among the first to recognize the consequences of relaxing this abstraction. An empirical study by Barro and Hercovitz (1980) anticipated the subsequent and more formal theoretical and econometric analysis of King and of Boschen and Grossman. In an early reassessment of equilibrium theories, Barro (1981, ch. 2, p.74) wrote: A significant weakness of the [equilibriuml approach is the dependence of some major conclusions on incomplete contemporaneous knowledge of monetary aggregates, which would presumably be observed cheaply and rapidly if such information were important. The role of incomplete current information on money in equilibrium business cycle theory parallels the use of adjustment costs to explain stickywages and priceswith an associated inefficient determination of quantities in Keynesian models. The underpinning of the two types of macroeconomic models are both vulnerable on a priori grounds. On the same page, however, Barro is quick to emphasize that: [D]oubts about the explanatory value for business cycles of currently available equilibrium theories do not constitute support for Keynesian disequilibrium analysis. The disequilibrium theories are essentially incomplete models that raise even larger questions about the consistency ofmodel structure with underlying rational behavior.

Leland B. Yeager

Papers

A Laissez-Faire Approach to Monetary Stability

International monetary relations: Theory, history, and policy

Austrian Economics, Neoclassicism, and the Market Test

In search of a monetary constitution

The significance of monetary disequilibrium