The Great Accretion and the Great Depression

Harold Cole (), Stefano Cravero and Jeremy Greenwood
Additional contact information
Harold Cole: University of Pennsylvania, http://www.sas.upenn.edu/~colehl/
Stefano Cravero: University of Pennsylvania, https://stefanocravero.com/
Jeremy Greenwood: University of Pennsylvania, http://www.jeremygreenwood.net/

No 42, Economie d'Avant Garde Research Reports from Economie d'Avant Garde

Abstract: The Second Industrial Revolution sparked a wave of new products and industrial processes, fueling an optimistic Roaring Twenties. But did excitement about technological progress contribute to an over accumulation of investment, despite a slowdown in new product development and satiated demand during the 1920s? And, was this over investment worsened by continuous process innovation? Could these factors have played a role in triggering the Great Depression? To explore these questions, a macroeconomic model that incorporates both process and product innovation is proposed. Proof-of-concept simulations are performed to assess whether these factors can help explain the Great Depression. The answer is yes.

Keywords: Great Depression; Over Accumulation; Process Innovation; Product Innovation; Rational Exuberance; Roaring Twenties; Satiation; Second Industrial Revolution; Technological Progress (search for similar items in EconPapers)
JEL-codes: E13 E22 E24 E32 N12 (search for similar items in EconPapers)
Date: 2026-01
New Economics Papers: this item is included in nep-fdg
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Persistent link: https://EconPapers.repec.org/RePEc:eag:rereps:42

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