A Small Open Economy in Depression: Lessons from Canada in the 1930s

Caroline Marie Betts, Michael David Bordo () and Angela Redish ()

No 4515, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper tests the hypothesis that idiosyncratic U.S. disturbances and their international propagation can account for the global Depression. Exploiting common stochastic trends in U.S. and Canadian interwar data, we estimate a small open economy model for Canada that decomposes output fluctuations into sources identifiable with world and country-specific disturbances. We find that the onset, depth and duration of output collapse in both Canada and the U.S. are primarily attributable to a common, permanent output shock leaving little significant role for idiosyncratic disturbances originating in either economy.

JEL-codes: E32 N12 (search for similar items in EconPapers)
Date: 1996-12
Note: ME
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Related works:
Working Paper: A Small Open Economy in Depression: Lessons form Canada in the 1930s (1993)
Journal Article: A Small Open Economy in Depression: Lessons from Canada in the 1930s (1996)
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