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U.S. Monetary and Fiscal Policy in the 1930s

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  • Price V. Fishback

Abstract

The paper provides a survey of fiscal and monetary policies during the 1930s under the Hoover and Roosevelt Administrations and how they influenced the policies during the recent Great Recession. The discussion of the causal impacts of monetary policy focuses on papers written in the last decade and the findings of scholars using dynamic structural general equilibrium modeling. The discussion of fiscal policy shows why economists do not see the New Deal as a Keynesian stimulus, describes the significant shift toward excise taxation during the 1930s, and surveys estimates of the impact of federal spending on local economies. The paper concludes with discussion of the lessons for the present from 1930s monetary and fiscal policy.

Suggested Citation

  • Price V. Fishback, 2010. "U.S. Monetary and Fiscal Policy in the 1930s," NBER Working Papers 16477, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:16477
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    References listed on IDEAS

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    1. Gary Richardson & William Troost, 2009. "Monetary Intervention Mitigated Banking Panics during the Great Depression: Quasi-Experimental Evidence from a Federal Reserve District Border, 1929-1933," Journal of Political Economy, University of Chicago Press, vol. 117(6), pages 1031-1073, December.
    2. Neumann, Todd C. & Fishback, Price V. & Kantor, Shawn, 2010. "The Dynamics of Relief Spending and the Private Urban Labor Market During the New Deal," The Journal of Economic History, Cambridge University Press, vol. 70(01), pages 195-220, March.
    3. Gauti B. Eggertsson, 2008. "Great Expectations and the End of the Depression," American Economic Review, American Economic Association, vol. 98(4), pages 1476-1516, September.
    4. Fishback, Price V. & Horrace, William C. & Kantor, Shawn, 2006. "The impact of New Deal expenditures on mobility during the Great Depression," Explorations in Economic History, Elsevier, vol. 43(2), pages 179-222, April.
    5. Christopher J. Erceg & Michael D. Bordo & Charles L. Evans, 2000. "Money, Sticky Wages, and the Great Depression," American Economic Review, American Economic Association, vol. 90(5), pages 1447-1463, December.
    6. Harold L. Cole & Lee E. Ohanian & Ron Leung, 2005. "Deflation and the international Great Depression: a productivity puzzle," Staff Report 356, Federal Reserve Bank of Minneapolis.
    7. Wallis, John Joseph & Benjamin, Daniel K., 1981. "Public Relief and Private Employment in the Great Depression," The Journal of Economic History, Cambridge University Press, vol. 41(01), pages 97-102, March.
    8. Garrett, Thomas A. & Wheelock, David C., 2006. "Why Did Income Growth Vary Across States During the Great Depression?," The Journal of Economic History, Cambridge University Press, vol. 66(02), pages 456-466, June.
    9. Gauti B. Eggertsson & Benjamin Pugsley, 2006. "The Mistake of 1937: A General Equilibrium Analysis," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 24(S1), pages 151-190, December.
    10. Price V. Fishback & William C. Horrace & Shawn Kantor, 2001. "The Impact of New Deal Expenditures on Local Economic Activity: An Examination of Retail Sales, 1929-1939," NBER Working Papers 8108, National Bureau of Economic Research, Inc.
    11. Harold L. Cole & Lee E. Ohanian, 1999. "The Great Depression in the United States from a neoclassical perspective," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Win, pages 2-24.
    12. Barber,William J., 2006. "Designs within Disorder," Cambridge Books, Cambridge University Press, number 9780521034319, April.
    13. Richardson, Gary & Van Horn, Patrick, 2009. "Intensified Regulatory Scrutiny and Bank Distress in New York City During the Great Depression," The Journal of Economic History, Cambridge University Press, vol. 69(02), pages 446-465, June.
    14. Price V. Fishback & Michael R. Haines & Shawn Kantor, 2007. "Births, Deaths, and New Deal Relief during the Great Depression," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 1-14, February.
    15. Harold L. Cole & Lee E. Ohanian, 2004. "New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 779-816, August.
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    Cited by:

    1. Mitchener, Kris James & Wandschneider, Kirsten, 2015. "Capital controls and recovery from the financial crisis of the 1930s," Journal of International Economics, Elsevier, vol. 95(2), pages 188-201.
    2. Nicholas Crafts & Peter Fearon, 2010. "Lessons from the 1930s Great Depression," Oxford Review of Economic Policy, Oxford University Press, vol. 26(3), pages 285-317, Autumn.
    3. Robert A. Eisenbeis & George G. Kaufman, 2016. "Not All Financial Crises Are Alike!," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 44(1), pages 1-31, March.

    More about this item

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-
    • N92 - Economic History - - Regional and Urban History - - - U.S.; Canada: 1913-

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