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Did International Economic Forces Cause The Great Depression?




This paper reviews and assesses international explanations for the depth and duration of the Great Depression. Many of the conclusions are negative. The U.S. Smoot-Hawley Tariff Act of 1930 came too late to account for the 1929 downturn and fails to explain the severity of the contraction in the U.S. The competitive devaluations of the 1930s redistributed the Depression's effects across countries but did not worsen it overall. The deflationary consequences of the liquidation of foreign exchange reserves were minor. Domestic central bank policies and their failure to be coordinated internationally must bear the major responsibility for the Depression. Copyright 1988 Western Economic Association International.

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  • Barry Eichengreen, 1988. "Did International Economic Forces Cause The Great Depression?," Contemporary Economic Policy, Western Economic Association International, vol. 6(2), pages 90-114, April.
  • Handle: RePEc:bla:coecpo:v:6:y:1988:i:2:p:90-114

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    References listed on IDEAS

    1. Field, Alexander J., 1984. "A New Interpretation of the Onset of the Great Depression," The Journal of Economic History, Cambridge University Press, vol. 44(02), pages 489-498, June.
    2. Eichengreen, Barry & Sachs, Jeffrey, 1985. "Exchange Rates and Economic Recovery in the 1930s," The Journal of Economic History, Cambridge University Press, vol. 45(04), pages 925-946, December.
    3. Meltzer, Allan H., 1976. "Monetary and other explanations of the start of the great depression," Journal of Monetary Economics, Elsevier, vol. 2(4), pages 455-471, November.
    4. Milton Friedman & Anna J. Schwartz, 1963. "A Monetary History of the United States, 1867–1960," NBER Books, National Bureau of Economic Research, Inc, number frie63-1, January.
    5. Bernanke, Ben S, 1983. "Nonmonetary Effects of the Financial Crisis in Propagation of the Great Depression," American Economic Review, American Economic Association, vol. 73(3), pages 257-276, June.
    6. Hamilton, James D., 1987. "Monetary factors in the great depression," Journal of Monetary Economics, Elsevier, vol. 19(2), pages 145-169, March.
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    Cited by:

    1. Gabriel P. Mathy, 2014. "Uncertainty Shocks and Equity Return Jumps and Volatility During the Great Depression," Working Papers 2014-02, American University, Department of Economics.
    2. Barry Eichengreen., 1989. "International Monetary Instability Between the Wars: Structural Flaws or Misguided Policies?," Economics Working Papers 89-118, University of California at Berkeley.

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