Abstract
We survey papers that seek model-based answers to the following questions regarding the Great Depression. What caused the worldwide collapse in output from 1929 to 1933? Why was the recovery from the trough of 1933 so protracted for the United States? How costly are Depression-like episodes in terms of welfare? Was the decline in output preventable? The papers point to: an important, but not exclusive, role of monetary factors in causing the decline; counterproductive labour market interventions in making the recovery slow; uninsured risk of unemployment in making Depression-like episodes costly; timely provision of liquidity as a preventive policy.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Bibliography
Bernanke, B. 1983. Nonmonetary effects of the financial crisis in the propagation of the Great Depression. American Economic Review 73: 257–276.
Bernanke, B. 1995. The macroeconomics of the Great Depression: A comparative approach. Journal of Money, Credit and Banking 27: 1–28.
Bernanke, B., and M. Gertler. 1989. Agency costs, net worth, and economic performance. American Economic Review 79: 14–31.
Bernanke, B., and H. James. 1991. The gold standard, deflation, and financial crisis in the Great Depression: An international comparison. In Financial markets and financial crises, ed. R. Glenn Hubbard. Chicago: University of Chicago Press.
Bordo, M., C. Erceg, and C. Evans. 2000. Money, sticky wages, and the Great Depression. American Economic Review 90: 1447–1463.
Chatterjee, S., and D. Corbae. 2007. On the aggregate welfare cost of Great Depression unemployment. Journal of Monetary Economics 54: 1529–1544.
Christiano, L., R. Motto, and M. Rostagno. 2003. The Great Depression and the Friedman–Schwartz hypothesis. Journal of Money, Credit, and Banking 35: 1119–1197.
Cole, H., and L. Ohanian. 1999. The Great Depression in the United States from a neoclassical perspective. Federal Reserve Bank of Minneapolis Quarterly Review 23(1): 25–31.
Cole, H., and L. Ohanian. 2000. Re-examining the contributions of money and banking shocks to the U.S. Great Depression. NBER Macroeconomics Annual 15(1): 183–227.
Cole, H., and L. Ohanian. 2004. New Deal policies and the persistence of the Great Depression: A general equilibrium analysis. Journal of Political Economy 112: 779–816.
Cole, H. Ohanian, L., and Leung, R. 2005. Deflation and the international Great Depression: A productivity puzzle, Working Paper No. 11237. Cambridge, MA: NBER.
Cooper, R., and D. Corbae. 2002. Financial collapse: A lesson from the Great Depression. Journal of Economic Theory 107: 159–190.
Eichengreen, B. 1992. Golden Fetters: The gold standard and the Great Depression 1919–1939. New York: Oxford University Press.
Fisher, I. 1933. The debt–deflation theory of Great Depressions. Econometrica 1: 337–357.
Friedman, M., and A. Schwartz. 1963. A monetary history of the United States, 1867–1960. Princeton: Princeton University Press.
Kehoe, T., and E.C. Prescott. 2002. Great Depressions of the twentieth century. Special Issue of the Review of Economic Dynamics 5(1): 1–18.
Lucas, R. 1993. Making a miracle. Econometrica 61: 251–272.
Mishkin, F. 1978. The household balance sheet and the Great Depression. Journal of Economic History 38: 918–937.
Ohanian, L. 2002. Why did productivity fall so much during the Great Depression? Federal Reserve Bank of Minneapolis Quarterly Review 26(2): 12–17.
Temin, P. 1976. Did monetary forces cause the Great Depression? New York: W.W. Norton and Company.
Author information
Authors and Affiliations
Editor information
Copyright information
© 2018 Macmillan Publishers Ltd.
About this entry
Cite this entry
Chatterjee, S., Corbae, P.D. (2018). Great Depression, Monetary and Financial Forces In. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2292
Download citation
DOI: https://doi.org/10.1057/978-1-349-95189-5_2292
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-95188-8
Online ISBN: 978-1-349-95189-5
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences