The Exchange Rate and the International Transmission of Business Cycle Disturbances: Some Evidence from the Great Depression

1980 ◽  
Vol 12 (4) ◽  
pp. 565 ◽  
Author(s):  
Ehsan U. Choudhri ◽  
Levis A. Kochin
Keyword(s):  
Exchange Rate ◽  
Business Cycle ◽  
Great Depression ◽  
International Transmission ◽  
The Great Depression ◽  
The Exchange Rate

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.

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.

Business cycle co-movement: Evidence from the Great Depression

2011 ◽  
Vol 58 (4) ◽  
pp. 362-372 ◽  
Author(s):  
Gabriel P. Mathy ◽  
Christopher M. Meissner
Keyword(s):  
Business Cycle ◽  
Great Depression ◽  
The Great Depression

scholarly journals Understanding Business Cycle Fluctuations in Pakistan

2020 ◽  
Vol 59 (1) ◽  
pp. 1-28
Author(s):  
Gulzar Khan ◽  
Ather Maqsood Ahmed
Keyword(s):  
Exchange Rate ◽  
Business Cycle ◽  
Open Economy ◽  
Rational Expectations ◽  
Forecast Error ◽  
Error Variance ◽  
New Keynesian ◽  
Impulse Response Functions ◽  
Business Cycle Fluctuations ◽  
The Exchange Rate

Notwithstanding the level of improvement in understanding the complexities of an economy, it is now well accepted that the ultimate incidence of various policy interventions leads to varied outcomes in terms of magnitude and persistence depending upon the structure of the economy. The objective of the present study is to disentangle the relative contributions of various exogenous and domestic shocks that contribute to business cycle fluctuations in Pakistan. The study is based on the New-Keynesian Open economy model, which is an extended version of (Gali & Monacili 2005). Keating’s two-step approach (1990, 2000) is employed to capture the dynamic behaviour of the variables of interest. Impulse response functions, along with forecast error variance decomposition analyses, are used to gain useful insights into the understanding of the transmission mechanism of policy and non-policy shocks. It is observed that fiscal policy does matter, at least in the short-run. The interest rate shock leads to the exchange rate appreciation thereby confirming the exchange rate puzzle. In response to adverse supply shocks, the Monetary Authority responds with a monetary contraction that prolongs the recessionary periods. Furthermore, it has a limited power to control inflation as inflation in Pakistan stems from supply-side factors as well as fiscal dominance. JEL Classification: C32, E52, E62, F41 Keywords: Open Economy, New Keynesian Model, Rational Expectations, Exchange Rate Puzzle

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.

Did Takahashi Korekiyo Rescue Japan from the Great Depression?

2003 ◽  
Vol 63 (1) ◽  
pp. 127-144 ◽  
Author(s):  
Myung Soo Cha
Keyword(s):  
Exchange Rate ◽  
Great Depression ◽  
Exchange Rate Regime ◽  
Structural Vector Autoregression ◽  
The Public ◽  
The Great Depression ◽  
Finance Minister ◽  
Floating Exchange Rate ◽  
Exchange Rate Shocks

Takahashi Korekiyo is remembered as a wise finance minister saving Japan from the Great Depression. The contribution of his policy measures however remains to be rigorously measured, with proper control of other forces also driving the recovery. Structural vector autoregression analysis of previously unexploited monthly data confirms the pivotal role of Takahashi's debt-financed fiscal expansion. Monetizing the public debts, the Bank of Japan maintained a neutral stance. The recovery was aided by exchange-rate shocks generated during the transition from the gold standard to the floating-exchange-rate regime and, to a smaller extent, by the world recovery.

Sign in / Sign up

Export Citation Format

Share Document