This paper investigates Romer's (1990) hypothesis linking uncertainty caused by the October 1929 crash with durable expenditure movements and the start of the downturn. The author estimates conditional variances for macroeconomic data, and computes the variance of stock returns. These goods are subject to different degrees of irreversibility. The response to a mean preserving spread implies a relative increase in investment in the less irreversible good -- in this case consumer durables. Therefore, a drop in durable consumption can be a sign of recession only because investment in physical capital is falling even more. However, there is no clear evidence supporting this implication, following the October crash.
Download Info
To our knowledge, this item is not available for
download. To find whether it is available, there are three
options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page
whether it is in fact available.
3. Perform a search for a similarly titled item that would be
available.
Publisher Info
Paper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number
97-04.
Length: 33 pages + tables Date of creation: Apr 1997 Date of revision: Handle: RePEc:kud:kuiedp:9704
Contact details of provider: Postal: Øster Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark Phone: (+45) 35 32 26 26 Fax: +45 35 32 30 00 Web page: http://www.econ.ku.dk More information through EDIRC
Order Information: Email:
For technical questions regarding this item, or to correct its listing, contact: (Henriette Aabo Hansen).
Find related papers by JEL classification: E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth E22 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles N12 - Economic History - - Macroeconomics and Monetary Economics; Growth and Fluctuations - - - U.S.; Canada: 1913-
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)