The Ends of 30 Big Depressions

Martin Ellison, Sang Seok Lee and Kevin Hjortshøj O’Rourke

No 896, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: How did countries recover from the Great Depression? In this paper we explore the argument that leaving the gold standard helped by boosting inflationary expectations and lowering real interest rates. We do so for a sample of 30 countries, using modern nowcasting methods and a new dataset containing more than 230,000 monthly and quarterly observations for over 1,500 variables. In those cases where the departure from gold happened on clearly defined dates, it seems clear that inflationary expectations rose in the wake of departure. Synthetic matching techniques suggest that the relationship is causal. Revised May 2020.

Date: 2020-05-12
New Economics Papers: this item is included in nep-mac
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