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.

Book Reviews

2013 ◽  
Vol 51 (1) ◽  
pp. 201-202
Keyword(s):  
Exchange Rate ◽  
Trade Policy ◽  
Great Depression ◽  
Dartmouth College ◽  
Policy Response ◽  
Trade Restrictions ◽  
The Great Depression ◽  
Rate Adjustment

Simon J. Evenett of University of St. Gallen reviews, “Trade Policy Disaster: Lessons from the 1930s” by Douglas A. Irwin. The EconLit abstract of this book begins: “Examines the trade policy disaster of the 1930s and considers the logic behind the policy response. Discusses the Great Depression and the rise of protectionism; resolving the trilemma—protection or depreciation; and trade restrictions and exchange rate adjustment—choice and consequences. Irwin is Professor of Economics at Dartmouth College. Index.”

Ideology and the Shadow of History: A Perspective on the Great Depression

2006 ◽  
Author(s):  
Barry Eichengreen ◽  
Peter Temin
Keyword(s):  
Monetary Policy ◽  
Great Depression ◽  
Gold Standard ◽  
World Economy ◽  
Policy Formation ◽  
Modern World ◽  
Policy Makers ◽  
Market Participants ◽  
The Great Depression ◽  
International Monetary Policy

The Great Depression is one of those seminal events in the modern world economy on which policy-makers and market participants rely when formulating their conceptions of how market economies behave. This chapter examines the international monetary policy formation during the Great Depression. It argues that the ideology of the gold standard led policy-makers to take actions that accentuated economic distress in the 1930s.

scholarly journals Economic Recovery from the Argentine Great Depression: Institutions, Expectations, and the Change of Macroeconomic Regime

1999 ◽  
Vol 59 (3) ◽  
pp. 567-599 ◽  
Author(s):  
Gerardo Della Paolera ◽  
Alan M. Taylor
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Central Bank ◽  
Great Depression ◽  
Gold Standard ◽  
Macroeconomic Policy ◽  
Economic Recovery ◽  
The Core ◽  
The Great Depression ◽  
The Creation

Did macroconomic interventions make any contribution to Argentina's revovery from the Great Depression? Macroeconomic policy deviated from gold-standard orthodoxy after the final suspension of convertibility in 1929. Fiscal policy was conservative. Monetary policy became unorthodox after 1931, when the Caja de conversión began rediscounting to sterilize gold outflows and avoid deflation. This change predated the creation of the central bank in 1935. A wider literature links the interwar depression in the core to flaws in the gold standard, and active monetary policy to escape from defaltion and slump; our work extends this idea to the periphery.

Impact of external currency exposures on macroeconomic policies

2020 ◽  
pp. 23-40
Author(s):  
I. V. Prilepskiy
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Positive Impact ◽  
Exchange Rate Regime ◽  
Macroeconomic Policies ◽  
Panel Regressions ◽  
Financial Account ◽  
Currency Exposure ◽  
Cross Country ◽  
The Impact

Based on cross-country panel regressions, the paper analyzes the impact of external currency exposures on monetary policy, exchange rate regime and capital controls. It is determined that positive net external position (which, e.g., is the case for Russia) is associated with a higher degree of monetary policy autonomy, i.e. the national key interest rate is less responsive to Fed/ECB policy and exchange rate fluctuations. Therefore, the risks of cross-country synchronization of financial cycles are reduced, while central banks are able to place a larger emphasis on their price stability mandates. Significant positive impact of net external currency exposure on exchange rate flexibility and financial account liberalization is only found in the context of static models. This is probably due to the two-way links between incentives for external assets/liabilities accumulation and these macroeconomic policy tools.

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.

Divided Government and U.S.Trade Policy: Much Ado About Nothing?

2000 ◽  
Vol 54 (4) ◽  
pp. 825-844 ◽  
Author(s):  
David Karol
Keyword(s):  
Trade Policy ◽  
Policy Preferences ◽  
Divided Government ◽  
Policy Outcomes ◽  
Trade Policies ◽  
Trade Barriers ◽  
Party Affiliation ◽  
Consistent Effect ◽  
Much Ado About Nothing

Scholars assert that divided government impedes the liberalization of U.S. trade policy. They claim that presidents favor freer trade and will use the negotiating authority Congress delegates to them to reach agreements lowering trade barriers. Since presidents gain more support from their congressional co-partisans, less liberalization ensues under divided government. This theory rests on the premise that party is unrelated to congressional trade policy preferences beyond legislators' tendencies to support their presidential co-partisans. Yet before 1970 congressional Democrats were relatively free trading regardless of the president's party affiliation. Since then, the same has been true of Republicans. Divided government facilitates the trade policies of presidents from the protectionist party since they win more support from their “opposition” in this area. Divided government does impede the efforts of presidents from the free-trading party to liberalize. I conclude that divided government has no consistent effect on trade policy outcomes.

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