Accounting for the great depression: A historical decomposition

This paper answers two distinct questions. First, To what extent do theories of the Great Depression account for movements in output during 1929:10–1933:12? Second, How much of the Depression could have been avoided if the money stock had grown along its anticipated pre-1929:9 path? The results reve...

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Bibliographic Details
Published in:Journal of macroeconomics 1994-04, Vol.16 (2), p.193-220
Main Authors: Fackler, James S., Parker, Randall E.
Format: Article
Language:English
Subjects:
Economic depression
Economic history
Economic models
Economic theory
Great Depression
Hypotheses
Macroeconomics
Studies
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Summary:This paper answers two distinct questions. First, To what extent do theories of the Great Depression account for movements in output during 1929:10–1933:12? Second, How much of the Depression could have been avoided if the money stock had grown along its anticipated pre-1929:9 path? The results reveal that an eclectic view of the Depression dominates monocausal explanations. Counterfactual simulations indicate much of the Depression would have been avoided if money growth had been maintained along its pre-Depression path.
ISSN:0164-0704
1873-152X
DOI:10.1016/0164-0704(94)90067-1