A monthly econometric model of the transmission of the great depression between the principal industrial economies
Document Type
Journal article
Source Publication
Economic Modelling
Publication Date
12-1-2000
Volume
17
Issue
4
First Page
515
Last Page
544
Publisher
Elsevier
Keywords
Great depression, Multicountry model, Optimal strategic policies
Abstract
This article describes and estimates, with monthly data, a model of the economic interactions between the United States, the United Kingdom, France and Germany over the years 1927-1936. Despite the radically different economic environment, the model shows broadly similar qualitative and dynamic responses to policy instruments and other changes to those of multi-country models estimated on more recent data. The model is simulated to assess the causes of the Great Depression and the particular contribution of European and American policies to the slump. Optimum strategic policy equilibria are then computed. They point to the mismanagement of the US economy as the principal cause of the depression, although French and German policies were also harmful. British policymakers performed rather well, but their economy suffered because of the other countries' policy errors.
DOI
10.1016/S0264-9993(99)00037-1
Print ISSN
02649993
Funding Information
This work has been supported by ESRC grant number R000231534. The model forms the basis of a project investigating the opportunities for international policy co-ordination during The Great Depression. It is available on http://scottie.stir.ac.uk/∼yma01/interwar, which contains the full variable and equation list of the model (in Fortran code), the data appendices and the whole database.{R000231534}
Publisher Statement
Copyright © 2000 Elsevier Science B.V. All rights reserved. Access to external full text or publisher's version may require subscription.
Full-text Version
Publisher’s Version
Language
English