EconPapers    
Economics at your fingertips  
 

Was the New Deal Contractionary?

Gauti Eggertsson

American Economic Review, 2012, vol. 102, issue 1, 524-55

Abstract: Can government policies that increase the monopoly power of firms and the militancy of unions increase output? This paper shows that the answer is yes under certain "emergency" conditions. These emergency conditions--zero interest rates and deflation--were satisfied during the Great Depression in the United States. The New Deal, which facilitated monopolies and union militancy, was therefore expansionary in the model presented. This conclusion is contrary to a large previous literature. The main reason for this divergence is that this paper incorporates rigid prices and the zero bound on the short-term interest rate. (JEL E23, E32, E52, E62, J51, N12, N42)

Date: 2012
References: Add references at CitEc
Citations: View citations in EconPapers (55)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/aer.102.1.524 (application/pdf)
http://www.aeaweb.org/aer/data/feb2012/20090438_data.zip dataset accompanying article (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Was the New Deal Contractionary? (2007) Downloads
Working Paper: Was the New Deal contractionary? (2006) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:102:y:2012:i:1:p:524-55

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().

 
Page updated 2024-12-28
Handle: RePEc:aea:aecrev:v:102:y:2012:i:1:p:524-55