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What - or Who - Started the Great Depression?


  • Lee E. Ohanian


Herbert Hoover. I develop a theory of labor market failure for the Depression based on Hoover's industrial labor program that provided industry with protection from unions in return for keeping nominal wages fixed. I find that the theory accounts for much of the depth of the Depression and for the asymmetry of the depression across sectors. The theory also can reconcile why deflation/low nominal spending apparently had such large real effects during the 1930s, but not during other periods of significant deflation.

Suggested Citation

  • Lee E. Ohanian, 2009. "What - or Who - Started the Great Depression?," NBER Working Papers 15258, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:15258
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations

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