IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

International Aspects of the Great Depression and the Crisis of 2007: Similarities, Differences, and Lessons

  • Richard S. Grossman

    ()

    (Department of Economics, Wesleyan University)

  • Christopher M. Meissner

    ()

    (Department of Economics, University of California, Davis, and National Bureau of Economic Research)

We focus on two international aspects of the Great Depression--financial crises and international trade—and try to discern lessons for the current economic crisis. Both downturns featured global banking crises which were generated by boom-slump macroeconomic cycles. During both crises, world trade collapsed faster than world incomes and the trade decline was highly synchronized across countries. In the Depression, income losses and rises in trade barriers explain trade’s collapse. Due to vertical specialization and more intense trade in durables today’s trade collapse is due to uncertainty and small shocks to trade costs hitting international supply chains. So far, the global economy has avoided the global trade wars and banking collapses of the Depression perhaps due to improved policy. Even so, the global economy remains susceptible to large shocks due to financial innovation and technological change as recent events illustrate.

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://repec.wesleyan.edu/pdf/rgrossman/2010002_grossman.pdf
Download Restriction: no

Paper provided by Wesleyan University, Department of Economics in its series Wesleyan Economics Working Papers with number 2010-002.

as
in new window

Length: 44 pages
Date of creation: Apr 2010
Date of revision: Aug 2010
Publication status: Published Oxford Review of Economic Policy (2010) 26 (3): 318-338. (doi: 10.1093/oxrep/grq021) http://oxrep.oxfordjournals.org/content/26/3/318.short
Handle: RePEc:wes:weswpa:2010-002
Note: Earlier version available at http://www2.warwick.ac.uk/fac/soc/economics/research/centres/cage/events/conferences/lessons/papers/grossman-meissner-040910.pdf
Contact details of provider: Postal: PAC 123, 238 Church Street, Middletown, CT 06459-0007
Phone: (860)685-2340
Fax: (860)685-2781
Web page: http://www.wesleyan.edu/econ/

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. Eichengreen, Barry & Hatton, Tim, 1988. "Interwar Unemployment in International Perspective," Institute for Research on Labor and Employment, Working Paper Series qt7bw188gk, Institute of Industrial Relations, UC Berkeley.
  2. Jacks, David S; Meissner, Christopher; Novy, Dennis, 2010. "Trade Booms, Trade Busts and Trade Costs," CAGE Online Working Paper Series 33, Competitive Advantage in the Global Economy (CAGE).
  3. Jonathan Eaton & Sam Kortum & Brent Neiman & John Romalis, 2010. "Trade and the global recession," Working Paper Research 196, National Bank of Belgium.
  4. M. Ayhan Kose & Christopher Otrok & Eswar S. Prasad, 2008. "Global Business Cycles: Convergence or Decoupling?," NBER Working Papers 14292, National Bureau of Economic Research, Inc.
  5. Luis A. V. Cat�o & Solomos N. Solomou, 2005. "Effective Exchange Rates and the Classical Gold Standard Adjustment," American Economic Review, American Economic Association, vol. 95(4), pages 1259-1275, September.
  6. Andrei A. Levchenko & Logan Lewis & Linda L. Tesar, 2009. "The Collapse of International Trade During the 2008-2009 Crisis: In Search of the Smoking Gun," Working Papers 592, Research Seminar in International Economics, University of Michigan.
  7. William Hynes & David S. Jacks & Kevin H. O'Rourke, 2009. "Commodity Market Disintegration in the Interwar Period," NBER Working Papers 14767, National Bureau of Economic Research, Inc.
  8. Jakob B. Madsen, 2001. "Trade Barriers and the Collapse of World Trade During the Great Depression," Southern Economic Journal, Southern Economic Association, vol. 67(4), pages 848-868, April.
  9. Ronald Findlay & Kevin H. O'Rourke, 2007. "Power and Plenty: Trade, War and the World Economy in the Second Millennium (Preface)," Trinity Economics Papers tep0107, Trinity College Dublin, Department of Economics.
  10. Federico, Giovanni, 2005. "Not Guilty? Agriculture in the 1920s and the Great Depression," The Journal of Economic History, Cambridge University Press, vol. 65(04), pages 949-976, December.
  11. Foreman-Peck, James & Hughes Hallett, Andrew & Ma, Yue, 2000. "A monthly econometric model of the transmission of the Great Depression between the principal industrial economies," Economic Modelling, Elsevier, vol. 17(4), pages 515-544, December.
  12. Michael D. Bordo & Alberto F. Cavallo & Christopher M. Meissner, 2007. "Sudden Stops: Determinants and Output Effects in the First Era of Globalization, 1880-1913," NBER Working Papers 13489, National Bureau of Economic Research, Inc.
  13. Jeanne, Olivier & Masson, Paul, 2000. "Currency crises, sunspots and Markov-switching regimes," Journal of International Economics, Elsevier, vol. 50(2), pages 327-350, April.
  14. Andrei A. Levchenko & Julian di Giovanni, 2009. "Putting the Parts together; Trade, Vertical Linkages, and Business Cycle Comovement," IMF Working Papers 09/181, International Monetary Fund.
  15. Eichengreen, Barry & Irwin, Douglas A., 2010. "The Slide to Protectionism in the Great Depression: Who Succumbed and Why?," The Journal of Economic History, Cambridge University Press, vol. 70(04), pages 871-897, December.
  16. Bensaid, Bernard & Jeanne, Olivier, 2000. " Self-Fulfilling Currency Crises and Central Bank Independence," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(4), pages 605-20, December.
  17. Barry Eichengreen, 2007. "The Breakup of the Euro Area," NBER Working Papers 13393, National Bureau of Economic Research, Inc.
  18. Kirsten Wandschneider, 2005. "The Stability of the Inter-war Gold Exchange Standard. Did Politics Matter?," Middlebury College Working Paper Series 0518, Middlebury College, Department of Economics.
  19. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-21, September.
  20. Crucini, M.J. & Kahn, J., 1994. "Tarrifs and Aggregate Economic Activity: Lessons from the Great Depression," RCER Working Papers 383, University of Rochester - Center for Economic Research (RCER).
  21. Grossman, Richard S., 1994. "The Shoe That Didn't Drop: Explaining Banking Stability During the Great Depression," The Journal of Economic History, Cambridge University Press, vol. 54(03), pages 654-682, September.
  22. Gary B. Gorton, 2010. "Questions and Answers about the Financial Crisis," NBER Working Papers 15787, National Bureau of Economic Research, Inc.
  23. Jian Wang & Charles Engel, 2008. "International Trade in Durable Goods: Understanding Volatility, Cyclicality, and Elasticities," 2008 Meeting Papers 210, Society for Economic Dynamics.
  24. Peter Temin, 1991. "Lessons from the Great Depression," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262700441, June.
  25. Davin Chor & Kalina Manova, 2010. "Off the Cliff and Back? Credit Conditions and International Trade during the Global Financial Crisis," Working Papers 08-2010, Singapore Management University, School of Economics.
  26. Virgiliu Midrigan & Joseph Kaboski & George Alessandria, 2010. "The Great Trade Collapse of 2008-09: An Inventory Adjustment?," 2010 Meeting Papers 107, Society for Economic Dynamics.
  27. Barry Eichengreen, 2004. "Viewpoint: Understanding the Great Depression," Canadian Journal of Economics, Canadian Economics Association, vol. 37(1), pages 1-27, February.
  28. Choudhri, Ehsan U & Kochin, Levis A, 1980. "The Exchange Rate and the International Transmission of Business Cycle Disturbances: Some Evidence from the Great Depression," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 12(4), pages 565-74, November.
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:wes:weswpa:2010-002. 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: (Manolis Kaparakis)

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.