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Transmission of the Great Depression

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  • Peter Temin

Abstract

To a first approximation, the question of how the Great Depression spread from country to country is short and straightforward: fixed exchange rates under the gold standard transmitted negative demand shocks. The first half of this paper will describe current thinking about the relationship between the gold standard and the Great Depression. The second half of the paper will look at a phenomenon not included in this first approximation: financial crises. Many have noted that banking panics and currency crises are bad for national economies, but few have tried to model their international spread.

Suggested Citation

  • Peter Temin, 1993. "Transmission of the Great Depression," Journal of Economic Perspectives, American Economic Association, vol. 7(2), pages 87-102, Spring.
    • Handle: RePEc:aea:jecper:v:7:y:1993:i:2:p:87-102
    Note: DOI: 10.1257/jep.7.2.87
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.7.2.87
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    References listed on IDEAS

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    Cited by:

    1. David S. Jacks & Dennis Novy, 2020. "Trade Blocs and Trade Wars during the Interwar Period," Asian Economic Policy Review, Japan Center for Economic Research, vol. 15(1), pages 119-136, January.
    2. James C. MacGee & Pedro S. Amaral, 2010. "A Multi-sectoral Approach to the U.S. Great Depression," 2010 Meeting Papers 1242, Society for Economic Dynamics.
    3. George S. Tavlas, 2011. "Two Who Called the Great Depression: An Initial Formulation of the Monetary‐Origins View," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43(2‐3), pages 565-574, March.
    4. Richardson, Gary & Van Horn, Patrick, 2018. "In the eye of a Storm: Manhattan's money center banks during the international financial crisis of 1931," Explorations in Economic History, Elsevier, vol. 68(C), pages 71-94.
    5. repec:clr:wugarc:y:2012:v:38i:2p:345 is not listed on IDEAS
    6. Olivier Accominotti, 2019. "International banking and transmission of the 1931 financial crisis," Economic History Review, Economic History Society, vol. 72(1), pages 260-285, February.
    7. Nicholas Crafts & Peter Fearon, 2010. "Lessons from the 1930s Great Depression," Oxford Review of Economic Policy, Oxford University Press, vol. 26(3), pages 285-317, Autumn.
    8. John Eatwell & Lance Taylor, 1998. "The Performance of Liberalized Capital Markets," SCEPA working paper series. 1998-13, Schwartz Center for Economic Policy Analysis (SCEPA), The New School, revised Sep 1998.
    9. Richard S. Grossman & Christopher M. Meissner, 2010. "International aspects of the Great Depression and the crisis of 2007: similarities, differences, and lessons," Oxford Review of Economic Policy, Oxford University Press, vol. 26(3), pages 318-338, Autumn.
    10. Bernanke, Ben S, 1995. "The Macroeconomics of the Great Depression: A Comparative Approach," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 27(1), pages 1-28, February.
    11. Accominotti, Olivier, 2012. "London Merchant Banks, the Central European Panic, and the Sterling Crisis of 1931," The Journal of Economic History, Cambridge University Press, vol. 72(1), pages 1-43, March.
    12. Marek A. Dąbrowski, 2015. "Did the Great Deflation of 1929–33 really have to happen? A reconsideration of the inevitability of the Great Deflation view," European Review of Economic History, Oxford University Press, vol. 19(3), pages 235-254.
    13. Borio, Claudio & Filardo, Andrew J., 2004. "Looking back at the international deflation record," The North American Journal of Economics and Finance, Elsevier, vol. 15(3), pages 287-311, December.
    14. Gabriel P. Mathy & Christopher M. Meissner, 2011. "Trade, Exchange Rate Regimes and Output Co-Movement: Evidence from the Great Depression," NBER Working Papers 16925, National Bureau of Economic Research, Inc.
    15. Nina Dodig & Hansjorg Herr, 2014. "Previous financial crises leading to stagnation – selected case studies," Working papers wpaper24, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    16. Albers, Thilo Nils Hendrik, 2018. "The prelude and global impact of the Great Depression: Evidence from a new macroeconomic dataset," Explorations in Economic History, Elsevier, vol. 70(C), pages 150-163.
    17. Raphael Hekimian & David Le Bris, 2016. "US Crashes of 2008 and 1929 How did the French market react? An empirical study," EconomiX Working Papers 2016-21, University of Paris Nanterre, EconomiX.
    18. Albers, Thilo & Uebele, Martin, 2015. "The global impact of the great depression," LSE Research Online Documents on Economics 64491, London School of Economics and Political Science, LSE Library.
    19. Mattesini, Fabrizio & Quintieri, Beniamino, 1997. "Italy and the Great Depression: An Analysis of the Italian Economy, 1929-1936," Explorations in Economic History, Elsevier, vol. 34(3), pages 265-294, July.
    20. Barry Eichengreen and Beth Simmons., 1993. "International Economics and Domestic Politics: Notes on the 1920s," Center for International and Development Economics Research (CIDER) Working Papers C93-029, University of California at Berkeley.
    21. Mathy, Gabriel P. & Meissner, Christopher M., 2011. "Business cycle co-movement: Evidence from the Great Depression," Journal of Monetary Economics, Elsevier, vol. 58(4), pages 362-372.
    22. Alois Guger, 2012. "Einkommensverteilung als Krisenursache," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 38(2), pages 345-356.
    23. Pierre Villa, 1996. "France in the Early Depression of the Thirties," Working Papers 1996-06, CEPII research center.
    24. Mervyn Allister King, 1993. "Debt Deflation: Theory and Evidence," FMG Discussion Papers dp175, Financial Markets Group.

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    More about this item

    JEL classification:

    • N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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