Great Apprehensions, Prolonged Depression: Gauti Eggertsson on the 1930s
Gauti Eggertsson uses a dynamic stochastic general equilibrium model in arguing that the period 1933 to 1937 represented recovery from the Great Depression, by virtue of regime change between the Hoover and Roosevelt administrations. He claims that the Hoover administration was defined by adherence to three â€œpolicy dogmas,â€ and that Roosevelt shifted expectations for the better by making credible commitments rejecting those dogmas. Eggertssonâ€™s argument is wrong on several counts. He misrepresents Hooverâ€™s economic policies, he mischaracterizes Roosevelt as â€œdogma-freeâ€ and committed to a clear alternative plan for recovery, and he misreads the economic consequences of Rooseveltâ€™s policies. Eggertssonâ€™s problems begin with his notion of â€œrecovery,â€ wherein the economyâ€™s progression from critical condition to prolonged infirmity is trumpeted as â€œrecovery.â€ Eggertssonâ€™s article is entitled â€œGreat Expectations;â€ I have titled this piece â€œGreat Apprehensionsâ€ because the Hoover-Roosevelt period needs to be seen a whole, in which the statist trend of policy and rhetoric created great uncertainty about the rules under which enterprise and investment would proceed. Moreover, Eggertssonâ€™s narrative cutoff at 1937 is misleading and opportunistic, as the ensuing years are all part of the same prolonged apprehension and under-performance.
Volume (Year): 6 (2009)
Issue (Month): 3 (September)
|Contact details of provider:|| Postal: Enterprise Hall, Room 354, 4400 University Drive, 3G4 Fairfax, VA 22030|
Phone: (703) 993-1151
Web page: http://econjwatch.org/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ejw:journl:v:6:y:2009:i:3:p:313-336. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jason Briggeman)The email address of this maintainer does not seem to be valid anymore. Please ask Jason Briggeman to update the entry or send us the correct email address
If references are entirely missing, you can add them using this form.