Technology Shocks and the Great Depression

2016 ◽  
Vol 76 (3) ◽  
pp. 909-933 ◽  
Author(s):  
Shingo Watanabe
Keyword(s):  
Business Cycles ◽  
Business Cycle ◽  
Great Depression ◽  
Imperfect Competition ◽  
Real Business Cycle ◽  
Technology Shocks ◽  
The Great Depression ◽  
Large Fluctuations ◽  
Technology Growth

Standard productivity measures indicate large fluctuations in technology during the Great Depression. This article's historical technology series (1892–1966), controlled for aggregation effects, varying input utilization, non-constant returns, and imperfect competition, does not indicate technology regress such that could trigger the downturn. In contrast, technology improvements in the recovery were so rapid that, over the whole Great Depression period, technology growth was highest among pre-WWII decades. This article also finds that output changed little and inputs fell when technology improved in the pre-WWII period. Real-business-cycle models have difficulty in explaining pre-WWII business cycles characterized by such responses.

scholarly journals Did Technology Shocks Drive the Great Depression? Explaining Cyclical Productivity Movements in U.S. Manufacturing, 1919–1939

2011 ◽  
Vol 71 (4) ◽  
pp. 827-858 ◽  
Author(s):  
ROBERT INKLAAR ◽  
HERMAN DE JONG ◽  
REITZE GOUMA
Keyword(s):  
Business Cycle ◽  
Great Depression ◽  
Returns To Scale ◽  
The United States ◽  
Increasing Returns ◽  
Real Business Cycle ◽  
Technology Shocks ◽  
Business Cycle Theory ◽  
Increasing Returns To Scale ◽  
The Great Depression

Technology shocks and declining productivity have been advanced as important factors driving the Great Depression in the United States, based on real business cycle theory. We estimate an improved measure of technology for interwar manufacturing, using data from the U.S. census reports. There is clear evidence of increasing returns to scale and we find no statistical proof that technology shocks led to changes in hours worked or other inputs. This contradicts a key prediction of real business cycle theory. We find that increasing returns to scale are not due to market power but to labor and capital hoarding.

scholarly journals Technology, Employment, and the Business Cycle: Do Technology Shocks Explain Aggregate Fluctuations?

1999 ◽  
Vol 89 (1) ◽  
pp. 249-271 ◽  
Author(s):  
Jordi Galí
Keyword(s):  
Simple Model ◽  
Business Cycles ◽  
Business Cycle ◽  
Monopolistic Competition ◽  
Real Business Cycle ◽  
Technology Shocks ◽  
Aggregate Fluctuations ◽  
G7 Countries ◽  
Technology Shock ◽  
The Business Cycle

I estimate a decomposition of productivity and hours into technology and non-technology components. Two results stand out: (a) the estimated conditional correlations of hours and productivity are negative for technology shocks, positive for nontechnology shocks; (b) hours show a persistent decline in response to a positive technology shock. Most of the results hold for a variety of model specifications, and for the majority of G7 countries. The picture that emerges is hard to reconcile with a conventional real-business-cycle interpretation of business cycles, but is shown to be consistent with a simple model with monopolistic competition and sticky prices. (JEL E32, E24)

Business Cycles and Current Economic Analysis

2021 ◽  
Vol 28 (3) ◽  
pp. 577-594
Author(s):  
Estela Bee Dagum
Keyword(s):  
Economic Analysis ◽  
Business Cycles ◽  
Business Cycle ◽  
The Other ◽  
Real Business Cycle ◽  
Business Cycle Theory ◽  
Economic Cycles ◽  
The Great Depression ◽  
Definition Of ◽  
Nominal Shocks

This is a brief introduction to the special issue on “New Developments in Modelling and Estimation of Economic Cycles” . The concept and definition of economic and business cycles are discussed together with two main schools of thought, the Keynesian and the neoclassical. Until the Keynesian revolution in mainstream economics in the wake of the Great Depression, classical and neoclassical explanations were the mainstream explanation of economic cycles; following the Keynesian revolution, neoclassical macroeconomics was largely rejected. There has been some resurgence of neoclassical approaches in the form of real business cycle (RBC) theory. Real business cycle theory is a class of macroeconomic model in which business cycle fluctuations to a large extent can be accounted for by real (in contrast to nominal) shocks. In a broad sense , there have been two ways by which economic and business cycles have been studied, one analyzing complete cycles and the other, studying the behavior of the economic indicators during incomplete phases by comparing current contractions or expansions whith corresponding phases in the past in order to assess current economic conditions. Two different methodologies have been applied for current economic analysis, the parametric one, that makes use of filters based on models, such as ARIMA and State Space models , and the other based on nonparametric digital filtering. Some of the invited papers of this issue deal with this second approach.

Real Business Cycle Views of the Great Depression and Recent Events: A Review of Timothy J. Kehoe and Edward C. Prescott's Great Depressions of the Twentieth Century

2008 ◽  
Vol 46 (3) ◽  
pp. 669-684 ◽  
Author(s):  
Peter Temin
Keyword(s):  
Economic Growth ◽  
Business Cycle ◽  
Great Depression ◽  
Real Business Cycle ◽  
Closed Economy ◽  
Tfp Growth ◽  
The Great Depression ◽  
Short Run ◽  
Definition Of ◽  
Almost All

This book collects essays, most of which were published earlier, into an advertisement for real business cycle (RBC) analysis. Half of the essays discuss the Great Depression; half discuss events of the 1980s and 1990s. They all use the general equilibrium model of economic growth to analyze short-run fluctuations in the rate of economic growth of various countries. I find that the use of closed economy models without frictions is not useful for the analysis of short-run variations in the rate of economic growth. Almost all of these essays end by claiming that variations in the rate of GDP growth were due to changes in the rate of total factor productivity (TFP) growth. They do not provide any explanation for fluctuations in the rate of TFP growth, leaving the reader no closer to understanding these periods of depression and slow growth. I discuss in turn the essays on the Great Depression, the essays on more recent fluctuations, and the definition of “great depressions” used in this volume.

Sign in / Sign up

Export Citation Format

Share Document