BENJAMIN GRAHAM ON BUFFER STOCKS

Surprisingly, Benjamin Graham, the acknowledged “Father of Value Investing,” considered his most important work to be invention Commodity Reserve Currency Plan during 1930s and 1940s. Previous studies have overlooked fact that, its three main components (buffer stocks, price stability, currency backing), Graham regarded first as other two “secondary” or “subsidiary.” By focusing on buffer-stock aspect, we demonstrate, first, breadth depth Graham’s overall conception in terms both micro- macroeconomics, and, second, considerable overlap with John Maynard Keynes’s ideas developed around same time, which are manifested particularly their common conclusion that inefficiency commodity markets could rectified only by government intervention. We also comment Perry Mehrling’s assessment “not any kind economist at all” ( JHET 2011).