Why did income growth vary across states during the Great Depression?
AbstractState per capita incomes became more disperse during the contraction phase of the Great Depression, and less disperse during the recovery phase. We investigate the effects of spatial dependence, industrial composition, bank failures and fiscal policies on state income growth during each phase. We find that industrial composition and spatial interdependencies contributed to negative state income growth during the contraction, whereas New Deal spending contributed to positive state income growth during the recovery phase. We find no evidence that differences in bank failure rates or state government expenditures contributed to variation in state income growth rates.
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Bibliographic InfoPaper provided by Federal Reserve Bank of St. Louis in its series Working Papers with number 2005-013.
Date of creation: 2006
Date of revision:
Publication status: Published in Journal of Economic History, June 2006, 66(2), pp. 456-66
Other versions of this item:
- Garrett, Thomas A. & Wheelock, David C., 2006. "Why Did Income Growth Vary Across States During the Great Depression?," The Journal of Economic History, Cambridge University Press, vol. 66(02), pages 456-466, June.
- NEP-ALL-2005-05-23 (All new papers)
- NEP-HIS-2005-05-23 (Business, Economic & Financial History)
- NEP-MAC-2005-05-23 (Macroeconomics)
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