Fackler and Parker argue that the Great Depression may have been preventable with a formalized policy rule proposed by economist Irving Fisher. Policymakers have an ongoing debate about whether formalized policy rules are better than discretionary policy decisions for economic outcomes. The authors’ analysis suggests that in the case of the Great Depression, if Fisher’s policy rule had been adopted in 1930 the collapse of the economy would have been avoided.
Working Paper Number
Working Paper 5
Fackler, James S. and Parker, Randall E., "Interwar Price Level Targeting" (2017). Institute for the Study of Free Enterprise Working Papers. 24.