In the nineteen-thirties, the prestige of monetary policy was, for a time, very low. The Federal Reserve System, deeply uncertain in its purpose, had failed to arrest the speculative boom of the late twenties; low interest rates and easy money were equally ineffective in dealing with the great depression. Bankers, in these years, as a result of error, unhappy accident and the enthusiastic denigration of left-wing critics, had suffered a severe decline in popular esteem. Down with them went the faith in monetary policy. Keynes argued that the rate of interest was a roundabout way of influencing
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