Devaluation, exports, and recovery from the Great Depression

Lennard, Jason ORCID: 0000-0002-6700-8969 and Paker, Meredith (2024) Devaluation, exports, and recovery from the Great Depression. Journal of Economic History. ISSN 0022-0507 (In Press)

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Abstract

This paper evaluates how a major policy shift – the suspension of the gold standard in September 1931 – affected employment outcomes in interwar Britain. We use a new high-frequency industry-level dataset and difference-in-differences techniques to isolate the impact of devaluation on exporters. At the micro level, the break from gold reduced the unemployment rate by 2.7 percentage points for export-intensive industries relative to non-export industries. At the aggregate level, this effect stimulated the labor market, the fiscal outlook, and economic growth. Devaluation was therefore an important initial spark of recovery from the depths of the Great Depression.

Item Type:	Article
Additional Information:	© 2024
Divisions:	Economic History
Subjects:	H Social Sciences > HC Economic History and Conditions
JEL classification:	E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E24 - Macroeconomics: Employment; Unemployment; Wages; Intergenerational Income Distribution (includes wage indexation) F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy Macroeconomics J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J64 - Unemployment: Models, Duration, Incidence, and Job Search N - Economic History > N1 - Macroeconomics and Monetary Economics; Growth and Fluctuations > N14 - Europe: 1913-
Date Deposited:	20 Dec 2024 09:39
Last Modified:	20 Dec 2024 11:09
URI:	http://eprints.lse.ac.uk/id/eprint/126517

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