The Global 1970s and the Echo of the Great Depression

Alan Taylor

No 15475, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The Great Depression ushered in a long era of deglobalization that lasted for many decades. An old conventional wisdom (e.g. Polanyi) argues that the common aspect of this shock across all countries, a deep depression, can explain the large and persistent global shift away from orthodox liberal economic policies--including, for example, the collapse of free trade. Yet there is substantial unexplored variation, since not all countries experienced the same depth of shock in the 1930s. Hence, if the "policy path dependence" argument is correct, we should be able to detect it using this variation. Those countries with deeper slumps ought to have seen policy shifts that were larger and more persistent. A fuller economic history of the reglobalization of the postwar period should confront this question, and we present some preliminary evidence for the path dependence hypothesis.

JEL-codes: N10 N40 N70 (search for similar items in EconPapers)
Date: 2009-11
New Economics Papers: this item is included in nep-his
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Published as Taylor, A. M. “The Global 1970s and the Echo of the Great Depression.” In The Shock of the Global: The 1970s in Perspective, edited by Niall Ferguson et al. Cambridge: Harvard University Press, 2010.

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