IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Recovery from the Great Depression: The Farm Channel in Spring 1933

Listed author(s):
  • Joshua K. Hausman
  • Paul W. Rhode
  • Johannes F. Wieland

In the four months following the trough of the Great Depression in March 1933, industrial production rose 57 percent. We argue that an important source of recovery was the direct effect of dollar devaluation on farm prices, incomes, and consumption. We call this the farm channel. Using daily spot and futures crop price data, we document that devaluation raised prices of traded crops and their close substitutes (other grains). And using novel state and county auto sales data, we document that recovery proceeded much more rapidly in farm areas. These cross-sectional effects are large, explain a substantial fraction of cross-state variation in auto sales growth, and are concentrated in areas growing traded crops or close substitutes. We also find that given the same exposure to farm price changes, spending rose more in counties with more farm debt. We aggregate our cross-sectional results using a simple incomplete markets model in which indebted farmers have high MPCs. It implies that the farm channel accounts for 30% or more of the spring recovery.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.nber.org/papers/w23172.pdf
Download Restriction: Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 23172.

as
in new window

Length:
Date of creation: Feb 2017
Handle: RePEc:nbr:nberwo:23172
Note: DAE EFG IFM ME
Contact details of provider: Postal:
National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.

Phone: 617-868-3900
Web page: http://www.nber.org
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. Sebastian Edwards, 2015. "Academics as Economic Advisers: Gold, the ‘Brains Trust,’ and FDR," NBER Working Papers 21380, National Bureau of Economic Research, Inc.
  2. Milton Friedman & Anna J. Schwartz, 1963. "A Monetary History of the United States, 1867–1960," NBER Books, National Bureau of Economic Research, Inc, number frie63-1.
  3. Raymond W. Goldsmith & Robert E. Lipsey & Morris Mendelson, 1963. "Introduction to "Studies in the National Balance Sheet of the United States, Vol. 2"," NBER Chapters, in: Studies in the National Balance Sheet of the United States, Volume 2, pages 1-40 National Bureau of Economic Research, Inc.
  4. Raymond W. Goldsmith & Robert E. Lipsey, 1963. "Studies in the National Balance Sheet of the United States, Volume 1," NBER Books, National Bureau of Economic Research, Inc, number gold63-1.
  5. Raymond W. Goldsmith & Robert E. Lipsey & Morris Mendelson, 1963. "Studies in the National Balance Sheet of the United States, Volume 2," NBER Books, National Bureau of Economic Research, Inc, number gold63-2.
  6. Price V. Fishback & Werner Troesken & Trevor Kollmann & Michael Haines & Paul W. Rhode & Melissa Thomasson, 2011. "Information and the Impact of Climate and Weather on Mortality Rates During the Great Depression," NBER Chapters, in: The Economics of Climate Change: Adaptations Past and Present, pages 131-167 National Bureau of Economic Research, Inc.
  7. Maurice Obstfeld & Kenneth S. Rogoff, 1996. "Foundations of International Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262150476, September.
  8. Fishback, Price V. & Horrace, William C. & Kantor, Shawn, 2005. "Did New Deal Grant Programs Stimulate Local Economies? A Study of Federal Grants and Retail Sales During the Great Depression," The Journal of Economic History, Cambridge University Press, vol. 65(01), pages 36-71, March.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:23172. 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: ()

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.