The New York Herald discovers the “accelerationist hypothesis” on April 27, 1933

One nice thing about reading a decade’s worth of newspapers from long ago is that every so often you come across something that puts a smile on your face.  Here’s the New York Herald from a week after FDR devalued the dollar:

As the effects of the first jab in the arm wear off, the country is plainly more than a little worried over the cure-all drug called inflation.  The first dose was just a promise – and what beautiful dreams it produced!  Exchange was about to be stabilized, stocks and commodities were to go kiting, everyone was to be prosperous – long live the 50-cent dollar!

Now the headache of the morning after is already unmistakable in many quarters.  Such is the familiar inevitable history of the inflation treatment, and it is interesting to see even the first preliminary stage following the classic formula.  Nothing is more certain to produce a temporary thrill, a delusion of wellbeing; nothing is more certain that, as the effects wear off, the patient feels worse than ever.  That is the chief viciousness of inflation.  It is in literal truth a habit-forming drug requiring ever larger and larger doses to keep the patient satisfied. (New York Herald, 4/27/33)

Did Bob Murphy write for the Herald back in 1933?

We know that Phillips didn’t really invent the Phillips curve in 1958, instead Irving Fisher wrote the first Phillips curve paper way back in 1923.  And now it seems that the Herald invented the accelerationist hypothesis back in 1933.



6 Responses to “The New York Herald discovers the “accelerationist hypothesis” on April 27, 1933”

  1. Gravatar of Doc Merlin Doc Merlin
    16. April 2010 at 10:07

    If you use adaptive expectations, the acceleration hypothesis drops right out and shines for everyone to see. This is another thing I don’t understand, about keynesians, their own models support this, yet they don’t accept it.

  2. Gravatar of marcus nunes marcus nunes
    16. April 2010 at 10:22

    It seems the NYH was “quoting” from Pigou´s Unemployment Theory published in 1933.

  3. Gravatar of Nick Rowe Nick Rowe
    16. April 2010 at 17:53

    Doc: what keynesians don’t support the accelerationist hypothesis? I thought that nearly all of them came around to accepting it in the late 1970’s/early 1980’s? It’s standard in New Keynesian thinking.

  4. Gravatar of Greg Ransom Greg Ransom
    17. April 2010 at 11:43

    You’ll find it also in Hayek’s 1928.

  5. Gravatar of Doc Merlin Doc Merlin
    17. April 2010 at 19:20


    Must just be my macro professor then, Nick.

  6. Gravatar of ssumner ssumner
    28. April 2010 at 13:34

    Doc Merlin, Instinctively they must know it is too good to be true.

    Marcus, I thought they had one more derivative, but maybe I was being too generous.

    Nick, Yes, but I was also told that New Keynesians accepted that monetary policy could still be effective in a liquidity trap. So there must still be a lot of old Keynesians around.

    Greg, Interesting. I knew that Hayek discussed the basic natural rate idea in the 1950s, i.e. before Friedman, but didn’t know he addressed the accelerationist hypothesis in 1928. But I can’t say I am surprised.

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