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The global impact of the great depression

Albers, Thilo and Uebele, Martin (2015) The global impact of the great depression. Economic History working paper series, 218/2015. The London School of Economics and Political Science, London, UK.

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Identification Number: 218/2015

Abstract

This paper provides monthly economic activity indicators for 30 countries on six continents for the period 1925–36 based on more than 1200 historical time series. Aggregating these to a global economic activity indicator shows that the global recovery after 1931 was slower than much-cited contemporary evidence suggests. On a disaggregated level, we find that the majority of European countries experienced recessionary tendencies already in the mid-1920s, which puts the notion of a US-originated Great Depression into perspective. Our evidence cautions against employing industrial production to assess crises and recoveries across space as manufacturing catch-up growth occurs less developed countries. In this vein we find that in contrast to established historiography Spain, albeit floating her currency, was severely affected by the crisis, and Japan was hit harder than annual industrial production suggests. Finally, mapping the Depression suggests that economic improvements of major trading partners could have served as a catalyst for a country’s recovery. As a methodological contribution, we develop a framework to aggregate non-stationary series using principal component weights, and we scale the resulting indicators to an interpretable dimension using the standard deviation of annual industrial production indices.

Item Type: Monograph (Working Paper)
Official URL: http://www.lse.ac.uk/economicHistory/home.aspx
Additional Information: © 2015 The Author
Subjects: H Social Sciences > H Social Sciences (General)
JEL classification: C - Mathematical and Quantitative Methods > C3 - Econometric Methods: Multiple; Simultaneous Equation Models; Multiple Variables; Endogenous Regressors
E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations; Cycles
E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies
N - Economic History > N1 - Macroeconomics and Monetary Economics; Growth and Fluctuations > N14 - Europe: 1913-
Series: Working Papers
Date Deposited: 24 Nov 2015 15:59
Last Modified: 21 Mar 2017 10:39
URI: http://eprints.lse.ac.uk/id/eprint/64491

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