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Title:Non-traditional open market operations: lessons from FDR's silver purchase program PDF Logo
Authors:Burdekin, Richard C. K.
Weidenmier, Marc D.
Issue Date:2005
Series/Report no.:Working paper series // Claremont Institute for Economic Policy Studies 2005-08
Abstract:When faced with a liquidity trap, a traditional open market purchase will generally be ineffective. Theoretical studies have suggested that intervention in other markets could offer a means of escaping from this trap. We provide some empirical evidence on the importance of non-traditional open market operations by examining the economic effects of FDR's Silver Purchase Program. We employ a structural VAR to assess silver's role in influencing overall money growth, inflation and output over the 1934-1938 period. The results suggest that the US silver purchase program was effective and highlight the potential importance of non-traditional methods for reflating modern economies in a liquidity trap.
Document Type:Working Paper
Appears in Collections:Claremont Colleges Working Papers in Economics, Department of Economics, Claremont McKenna College

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