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Crisis and Growth in the Advanced Economies: What We Know, What We Do not, and What We Can Learn from the 1930s

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  • Barry Eichengreen

    () (University of California, Evans Hall 508, CA 94708 Berkeley, USA.)

Abstract

This paper addresses the question of whether the medium- and long-term growth potential of the advanced economies has been impaired by the global financial crisis. It evidence from the Great Despression of the 1930s to illuminate the prospects, concluding the following. First, the impact of weak bank balance sheets and heightened risk aversion made it harder for small firms. in particular, to fund investment projects. Second, there is little evidence that increased public debt or policy uncertainity had major effects in depressing investment. Third, structural unemployment dissolved quickly in the face of increased demand. Fourth and finally, the crisis was also an opportunity as firms used the downtime created by the Depression to reorganize and modernize their operations.

Suggested Citation

  • Barry Eichengreen, 2011. "Crisis and Growth in the Advanced Economies: What We Know, What We Do not, and What We Can Learn from the 1930s," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 53(3), pages 383-406, September.
  • Handle: RePEc:pal:compes:v:53:y:2011:i:3:p:383-406
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    References listed on IDEAS

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    Cited by:

    1. Richard Pomfret, 2011. "Global Crises, Fiscal Imbalances and Global Instability: Interests and Reactions of Asian Economies," School of Economics Working Papers 2011-33, University of Adelaide, School of Economics.
    2. Nicholas Crafts, 2013. "Long-Term Growth in Europe: What Difference does the Crisis Make?," National Institute Economic Review, National Institute of Economic and Social Research, vol. 224(1), pages 14-28, May.
    3. repec:kap:iaecre:v:23:y:2017:i:3:d:10.1007_s11294-017-9642-z is not listed on IDEAS
    4. Pomfret, Richard, 2014. "European crises and the Asian economies," Journal of Asian Economics, Elsevier, vol. 31, pages 71-81.
    5. Richard Pomfret, 2012. "The Post-2007 Crises and Europe's Place in the Global Economy," CASE Network Studies and Analyses 439, CASE-Center for Social and Economic Research.

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