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Real Origins of the Great Depression: Monopoly Power, Unions and the American Business Cycle in the 1920s

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  • Albrecht Ritschl

    (Humboldt-University of Berlin and CEPR)

  • Monique Ebell

    (Humboldt-University of Berlin)

Abstract

If both downturns were caused by workers' improved ability to bargain collectively, then why was the Great Depression so much more severe than its precursor? According to our model, an increase in monopoly power amplifies the impact of collective bargaining on output and employment. Hence, if monopoly power were greater at the onset of the Great Depression than at the onset of the recession of 1920-21, the former would be more severe. Indeed, there is evidence to suggest that monopoly power increased substantially during the Coolidge administration due to weak anti-trust enforcement.

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Bibliographic Info

Paper provided by Society for Economic Dynamics in its series 2007 Meeting Papers with number 712.

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Date of creation: 2007
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Handle: RePEc:red:sed007:712

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Cited by:
  1. Hatton, Timothy J. & Thomas, Mark, 2010. "Labour Markets in the Interwar Period and Economic Recovery in the UK and the USA," CEPR Discussion Papers 7983, C.E.P.R. Discussion Papers.
  2. Timothy J. Hatton & Mark Thomas, 2012. "Labour Markets in Recession and Recovery: The UK and the USA in the 1920s and 1930s," CEH Discussion Papers 001, Centre for Economic History, Research School of Economics, Australian National University.
  3. David M. Clark & Richard Layard & Rachel Smithies, 2008. "Improving access to psychological therapy: initial evaluation of the two demonstration sites," LSE Research Online Documents on Economics 51591, London School of Economics and Political Science, LSE Library.
  4. Joshua L. Rosenbloom & William A. Sundstrom, 2009. "Labor-Market Regimes in U.S. Economic History," NBER Working Papers 15055, National Bureau of Economic Research, Inc.
  5. repec:cge:warwcg:146 is not listed on IDEAS
  6. Klein, Alexander & Otsuy, Keisuke, 2013. "Efficiency, Distortions and Factor Utilization during the Interwar Period," CAGE Online Working Paper Series 147, Competitive Advantage in the Global Economy (CAGE).
  7. Alex Klein & Keisuke Otsu, 2013. "Efficiency, Distortions and Factor Utilization during the Interwar Period," Studies in Economics 1317, Department of Economics, University of Kent.
  8. Marco Manacorda, 2008. "The Cost of Grade Retention," CEP Discussion Papers dp0878, Centre for Economic Performance, LSE.
  9. Christopher P. Reicher, 2009. "Expectations, Monetary Policy, and Labor Markets: Lessons from the Great Depression," Kiel Working Papers 1543, Kiel Institute for the World Economy.

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