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The Gold Standard and the Great Depression: a Dynamic General Equilibrium Model

Author

Listed:
  • Luca Pensieroso

    (IRES, Universite catholique de Louvain)

  • Romain Restout

    (Universite de Lorraine, Université de Strasbourg, CNRS, BETA, 54000, Nancy and IRES, Universite catholique de Louvain.)

Abstract

Was the Gold Standard a major determinant of the onset and the protracted character of the Great Depression of the 1930s in the United States and Worldwide? In this paper, we model the ‘Gold-Standard hypothesis’ in a dynamic general equilibrium framework. We show that encompassing the international and monetary dimensions of the Great Depression is important to understand what happened in the 1930s, especially outside the United States. Contrary to what is often maintained in the literature, our results suggest that the vague of successive nominal exchange rate devaluations coupled with the monetary policy implemented in the United States did not act as a relief. On the contrary, they made the Depression worse.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Luca Pensieroso & Romain Restout, 2019. "The Gold Standard and the Great Depression: a Dynamic General Equilibrium Model," Working Papers 06-19, Association Française de Cliométrie (AFC).
  • Handle: RePEc:afc:wpaper:06-19
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    JEL classification:

    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • N01 - Economic History - - General - - - Development of the Discipline: Historiographical; Sources and Methods

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