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Deficit spending in the Nazi recovery, 1933–1938: a critical reassessment

Ritschl, Albrecht (2002) Deficit spending in the Nazi recovery, 1933–1938: a critical reassessment. Journal of the Japanese and International Economies, 16 (4). pp. 559-582. ISSN 0889-1583

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Identification Number: 10.1006/jjie.2002.0515


This paper examines the effects of deficit spending and work-creation on the Nazi recovery, employing archival data on the public deficit and modern time series techniques. Although deficit spending was tried and full employment was reached within four years, the fiscal impulse generated by the deficits does not appear to have driven the speed of recovery. VAR forecasts of output using fiscal and monetary policy instruments suggest only a minor role for active policy during the recovery. Nazi policies deliberately crowded out private demand to ensure high rates of rearmament. Military spending dominated civilian work-creation already in 1934. Investment in autobahn construction was minimal during the recovery and gained momentum only in 1936 when full employment was approaching. Continued fiscal and monetary expansion after that date may have prevented the economy from sliding back into recession. We find some effects of the Four Years Plan of late 1936, which boosted government deficits further and tightened public control over the economy.

Item Type: Article
Official URL:
Additional Information: © 2002 Elsevier Science (USA)
Divisions: Economic History
Subjects: H Social Sciences > HC Economic History and Conditions
D History General and Old World > DD Germany
Date Deposited: 27 Nov 2009 12:14
Last Modified: 16 May 2024 00:03

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