Deficit Spending in the Nazi Recovery, 1933-1938: A Critical Reassessment
AbstractThis paper examines the effects of deficits spending and work-creation on the Nazi recovery. Although deficits were substantial and full employment was reached within four years, archival data on public deficits suggest that their fiscal impulse was too small to account for the speed of recovery. VAR forecasts of output using fiscal and monetary policy instruments also suggest only a minor role for active policy during the recovery. Nazi policies deliberately crowded out private demand to ensure high rates of rearmament. Military spending dominated civilian work-creation already in 1934. Investment in autobahn construction was minimal during the recovery and gained momentum only in 1936 when full employment was approaching. Continued fiscal and monetary expansion after that date may have prevented the economy from sliding back into recession. We find some effects of the Four Years Plan of late 1936, which boosted government spending further and tightened public control over the economy.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of the Japanese and International Economies.
Volume (Year): 16 (2002)
Issue (Month): 4 (December)
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Web page: http://www.elsevier.com/locate/inca/622903
Other versions of this item:
- Albrecht Ritschl, . "Deficit Spending in the Nazi Recovery, 1933-1938: A Critical Reassessment," IEW - Working Papers, Institute for Empirical Research in Economics - University of Zurich 068, Institute for Empirical Research in Economics - University of Zurich.
- N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-
- N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications
- E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
- E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
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