BIS Review 80/1997  -2-  that there was a longer-term anchor which forced the price level back towards its starting point), but there was considerable variation (both in prices and in output) in the short term.
• The Depression forced a re-appraisal, but fiscal policy became the instrument to smooth the fluctuations in output -- monetary policy was seen to be caught in the infamous liquidity trap. This idea has not entirely disappeared, and the notion of “pushing on a string” still has currency.