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Some Observations on the Great Depression in Germany

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  • Weder Mark

    (University of Adelaide, Adelaide, Australia)

Abstract

This paper evaluates the role of preference shocks during the Great Depression in Germany. From Euler equation residuals, I am able to identify a series of contractionary shocks that struck the German economy from 1929 to 1932. I apply the sequence of these taste innovations to a dynamic general-equilibrium model and find that the size and the order of shocks can generate a pattern that can explain the lion’s share of the decline in economic activity. The artificial economy also predicts a swift recovery after 1932, thereby questioning any significant effects of Nazi economic policy.

Suggested Citation

  • Weder Mark, 2006. "Some Observations on the Great Depression in Germany," German Economic Review, De Gruyter, vol. 7(1), pages 113-133, February.
    • Handle: RePEc:bpj:germec:v:7:y:2006:i:1:p:113-133
    DOI: 10.1111/j.1468-0475.2006.00149.x
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    Cited by:

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    2. Mark Weder, 2006. "A heliocentric journey into Germany's Great Depression," Oxford Economic Papers, Oxford University Press, vol. 58(2), pages 288-316, April.

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    More about this item

    Keywords

    Demand shocks; Great Depression; Germany;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-

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