Economics, Econometrics and Finance
5 years ago

Hicks's Theory Reveals Impact of Short-Term Interest Rates on Economy

Journal of the History of Economic Thought
HICKS’S THEORY OF THE SHORT-TERM RATE OF INTEREST AND THORNTON’S AND HAWTREY’S INFLUENCES
Lucy Brillant

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John Richard Hicks developed a theory of short-term interest rates in the 1960s, inspired by Henry Thornton and Ralph George Hawtrey. He saw short-term rates as the price of liquidity and argued against tight monetary policies in Britain during the 1960s to 1970s.