The global impact of the great depression

Thilo Albers and Martin Uebele

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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.

Keywords: great depression; economic activity indices; 20th century; business cycles (search for similar items in EconPapers)
JEL-codes: C3 E32 E58 N14 (search for similar items in EconPapers)
Pages: 96 pages
Date: 2015
New Economics Papers: this item is included in nep-his and nep-mac
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:64491

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