Cheap money: the English experiment of 1945-1947

Abstract

The article, which dates back to November 1950, argues that the defect of the Daltonian policy is to be sought not so much in the practical consequences of a further lowering of a cheap interest rate, as in a logical deficiency, i.e. an error in the estimation of the probable nature of the long run expectations of the market, which entailed the failure of that policy. This is the reason why the author judges Dalton’s experiment as a negative one, while acquitting it from the accusation, widely made against it, of having introduced a new serious inflationary factor into the post-war British economic situation. To this problem the author devotes the core of its re-examination.

JEL: E32, E43, E65