The Neglected Contributions of R.G.Hawtrey to Macroeconomics

NO : WP-2024-009

AUTHOR : D.M.Nachane

TITLE :  The Neglected Contributions of R.G.Hawtrey to Macroeconomics


In the inter war years (1919-39) macroeconomics was at the forefront of attention of both thinkers as well as policymakers. This paper focuses on Hawtrey, one of the major economists of that period whose contemporary influence on macroeconomic theory as well as policy was significant, but whose contributions, in the aftermath of World War II, have gone largely into oblivion. We begin with a brief exposition of the main strands of Hawtreyan macroeconomics. We then try to demonstrate the significant influence that Hawtrey’s ideas had on Keynes’ views, highlighting both the areas in which their ideas differed and where their views reinforced each other’s. Before concluding, we draw attention to at least five contributions of Hawtrey, which have a strong claim to be considered original but which have received scant professional credit viz. the multiplier, the accelerator, quantitative easing, crowding out and the announcement effect of monetary policy.

Keywords: instability of credit, credit deadlock, quantitative easing , the multiplier, crowding out
JEL Code: B22, B31, E12