Differences across countries or decades in the countercyclical stance of fiscal policy can help identify whether the growth in government spending affects output growth and so speeds recovery from a recession. We use the heterogeneity in the government-spending reaction functions across twenty...

Differences across countries or decades in the countercyclical stance of fiscal policy can help identify whether the growth in government spending affects output growth and so speeds recovery from a recession. We use the heterogeneity in the government-spending reaction functions across twenty...

Interwar macroeconomic history is a natural place to look for evidence on the correlation between output growth and inflation or unexpected inflation. We apply time-series methods to measure unexpected inflation for more than twenty countries using both retail and wholesale prices. There is a...

Interwar macroeconomic history is a natural place to look for evidence on the correlations between (a) deflation and depression and (b) unexpected deflation and depression. We apply time-series methods to measure unexpected deflation or inflation for 26 countries from 1922 to 1939. The results...

Interwar macroeconomic history is a natural place to look for evidence on the correlations between (a) deflation and depression and (b) unexpected deflation and depression. We apply time-series methods to measure unexpected deflation or inflation for 26 countries from 1922 to 1939. The results...

Is the Great Depression amenable to real business cycle theory ? In the 1970s and 1980s Lucas and Prescott took an abstentionist stance. They admitted that, because of its exceptional character, an explanation of the Great Depression was beyond the grasp of the equilibrium approach to the...

Economists have long viewed recessions as contributing to increasing inequality. This conclusion is largely based on data from a period in which inequality was increasing over time, however. This Paper examines the connection between long-run trends and cyclical variation in earnings inequality....

John Maynard Keynes composed The General Theory as a response to the Great Crash and Great Depression with all their devastating consequences for the US macro economy and financial markets, as well as the rest of the world. The role of expectations his new theory set out has been widely...

John Maynard Keynes composed The General Theory as a response to the Great Crash and Great Depression with all their devastating consequences for the US macro economy and financial markets, as well as the rest of the world. The role of expectations his new theory set out has been widely...

The differential response of cash reserves of member banks and nonmember banks not subject to the 1936-37 increase in reserve requirements is estimated to determine whether the 1937-38 recession was caused by the increase in reserve requirements. We identify 17 states that maintained constant...