To Raise the Golden Anchor? Financial Crises and Uncertainty During the Great Depression

1999 ◽  
Vol 59 (3) ◽  
pp. 624-658 ◽  
Author(s):  
J. Peter Ferderer ◽  
David A. Zalewski
Keyword(s):  
Economic Growth ◽  
Interest Rate ◽  
Great Depression ◽  
Interwar Period ◽  
Gold Standard ◽  
Financial Crises ◽  
Capital Flight ◽  
The Great Depression ◽  
Interest Rate Volatility

This study examines the interplay between financial crises, uncertainty, and economic growth during the interwar period. Comparing the experiences of ten countries, we provide evidence that reductions in the credibility of a country's commitment to the gold standard generated capital flight and higher interest rate volatility. This volatility, in turn, was inversely correlated with economic growth. These results suggest that financial crises helped propagate the Great Depression, in part, by increasing uncertainty.

scholarly journals Transmission of the Great Depression

1993 ◽  
Vol 7 (2) ◽  
pp. 87-102 ◽  
Author(s):  
Peter Temin
Keyword(s):  
Great Depression ◽  
Gold Standard ◽  
Financial Crises ◽  
Currency Crises ◽  
The Great Depression ◽  
First Approximation ◽  
Current Thinking ◽  
Banking Panics ◽  
National Economies ◽  
The Relationship

To a first approximation, the question of how the Great Depression spread from country to country is short and straightforward: fixed exchange rates under the gold standard transmitted negative demand shocks. The first half of this paper will describe current thinking about the relationship between the gold standard and the Great Depression. The second half of the paper will look at a phenomenon not included in this first approximation: financial crises. Many have noted that banking panics and currency crises are bad for national economies, but few have tried to model their international spread.

The Political ‘Left’ in the Interwar Period, 1924–1939

2014 ◽  
Author(s):  
Pamela Radcliff
Keyword(s):  
Twentieth Century ◽  
Great Depression ◽  
Interwar Period ◽  
The Political ◽  
Community Life ◽  
Bolshevik Revolution ◽  
Mass Society ◽  
The Great Depression ◽  
Political Struggles ◽  
Political Left

In the turbulent interwar period, the political ‘Left’ was one of the most visible protagonists, with historians continuing to disagree about the role it played in shaping the outcome of the political struggles. Embedded in strong ‘moral narratives’ about the ‘rise of fascism’, the ‘crisis of democracy’, and the nature of the Bolshevik Revolution, the political Left has been vilified or lionized. For the period from the mid-1920s until 1939, both supporters and detractors agree that the Left was on the defensive, internally divided and weakened by the Great Depression and subject to repression by the state, whether democratic, authoritarian, or Stalinist. This chapter argues that the failure narrative should not subsume the vibrant experimentation and rich and contradictory diversity of the Left experience. A portrait emerges of the interwar Left that wrestled with inevitably imperfect and varied solutions to the ‘problem of community life’ in twentieth-century mass society.

scholarly journals The euro and the recent European crisis vis-à-vis the gold standard and the great depression: institutionalities, specificities and interfaces

2017 ◽  
Vol 37 (1) ◽  
pp. 147-166 ◽  
Author(s):  
GIULIANO CONTENTO DE OLIVEIRA ◽  
PAULO JOSÉ WHITAKER WOLF
Keyword(s):  
Great Depression ◽  
Gold Standard ◽  
Institutional Arrangements ◽  
European Countries ◽  
Lender Of Last Resort ◽  
Central European ◽  
The Past ◽  
The Great Depression ◽  
European Crisis ◽  
Harmful Effects

ABSTRACT The paper aims to establish interfaces between the Great Depression of the 1930s under the Gold Standard and the recent European Crisis under the Euro. It is argued that, despite their specificities, both crises revealed the potentially harmful effects, in economic and social terms, of institutional arrangements that considerably reduce the autonomy of monetary, fiscal and exchange rate policies of participating countries, without being accompanied by increased cooperation between them, which should be led by a global (in the case of the Great Depression) or regional (in the case of the European Crisis) hegemonic power, which is not only capable of, but is also willing to act as a buyer and lender of last resort, especially in circumstances characterized by increased uncertainty, the deterioration of the general state of expectations and increased liquidity preference. In fact, central European countries in the past and peripheral European countries nowadays were effectively pushed toward deflationary adjustments in which a reduction of prices and wages was accompanied by a reduction of output and employment levels. Thus, in the absence of the possibility of restoring the autonomy of economic policy, the overcome of the crisis necessarily requires, both before - under the Gold Standard - and nowadays - under the Euro -, joint actions aimed to assure that the responsibility for the adjustment will be equally distributed among all the economies, in order to avoid that some of them benefit at the expense of the others in this process.

Learning about Growth and Democracy

2020 ◽  
Vol 114 (4) ◽  
pp. 1195-1212
Author(s):  
SCOTT F. ABRAMSON ◽  
SERGIO MONTERO
Keyword(s):  
Economic Growth ◽  
Twentieth Century ◽  
Economic Development ◽  
Great Depression ◽  
The Great Depression ◽  
The World ◽  
Past Experiences

We develop and estimate a model of learning that accounts for the observed correlation between economic development and democracy and for the clustering of democratization events. In our model, countries’ own and neighbors’ past experiences shape elites’ beliefs about the effects of democracy on economic growth and their likelihood of retaining power. These beliefs influence the choice to transition into or out of democracy. We show that learning is crucial to explaining observed transitions since the mid-twentieth century. Moreover, our model predicts reversals to authoritarianism if the world experienced a growth shock the size of the Great Depression.

WHY ECONOMIC GROWTH IS NEVER SUSTAINABLE

2011 ◽  
Vol 2 ◽  
Author(s):  
Ivars Brīvers
Keyword(s):  
Economic Growth ◽  
Economic Theory ◽  
Sustainable Development ◽  
Steady State ◽  
Great Depression ◽  
Costs And Benefits ◽  
Global Crisis ◽  
The Great Depression ◽  
The People ◽  
State Economy

The first decade of the XXI century clearly shows that the notion of the people concerning the values and goals in economy should be revised. As a result of global crisis economic theory may experience essential changes, as it was during the Great Depression in the XX century. The aim of the paper is to show the necessity of reconsidering the goals in economy. The hypothesis is that growth economy has become non-sustainable and it should be substituted by an economy of a different design – steady-state economy. The paper contains a review and analysis of various ideas about the problem, focusing mainly on the interpretation of the notion of sustainable development and the costs and benefits of economic growth; the way, how we measure things in economy and about the widespread illusions about the possibility of perpetual economic growth. The conclusion is that any growth, including economic growth is never sustainable.

scholarly journals The Slide to Protectionism in the Great Depression: Who Succumbed and Why?

2010 ◽  
Vol 70 (4) ◽  
pp. 871-897 ◽  
Author(s):  
Barry Eichengreen ◽  
Douglas A. Irwin
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Trade Policy ◽  
Great Depression ◽  
Gold Standard ◽  
Trade Policies ◽  
Trade Barriers ◽  
The Great Depression ◽  
Cross Country ◽  
Import Quotas

The Great Depression was marked by a severe outbreak of protectionist trade policies. But contrary to the presumption that all countries scrambled to raise trade barriers, there was substantial cross-country variation in the movement to protectionism. Specifically, countries that remained on the gold standard resorted to tariffs, import quotas, and exchange controls to a greater extent than countries that went off gold. Just as the gold standard constraint on monetary policy is critical to understanding macroeconomic developments in this period, exchange rate policies help explain changes in trade policy.

scholarly journals Hall of Mirrors: The Great Depression, the Great Recession, and the Uses—and Misuses—of History

2015 ◽  
Vol 89 (3) ◽  
pp. 557-569 ◽  
Author(s):  
Per H. Hansen
Keyword(s):  
United States ◽  
Great Depression ◽  
Great Recession ◽  
Financial Crises ◽  
The United States ◽  
Comparative Approach ◽  
The Great Recession ◽  
The Great Depression ◽  
Successful Search ◽  
Similarities And Differences

Barry Eichengreen's new bookHall of Mirrorsis a detailed, excellent, and somewhat pessimistic comparison of the two most serious financial crises ever—their causes, development, and consequences. Readers well versed in the comprehensive literature on the Great Depression and the Great Recession in the United States and Europe will not find much information inHall of Mirrorsthat is completely new, but most others will. Whatisnew is the comparative approach: the detailed and analytically successful search for similarities and differences between the Great Depression and the Great Recession.

Golden Fetters. The Gold Standard and the Great Depression, 1919-1939.

1994 ◽  
Vol 47 (1) ◽  
pp. 207
Author(s):  
Derek H. Aldcroft ◽  
Barry Eichengreen
Keyword(s):  
Great Depression ◽  
Gold Standard ◽  
The Great Depression
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