Business cycle co-movement: Evidence from the Great Depression

Gabriel Mathy () and Christopher Meissner

Journal of Monetary Economics, 2011, vol. 58, issue 4, 362-372

Abstract: Recent analysis focuses on the gold standard as a channel for the transmission of the Great Depression. Trade linkages, which loom large in the recent literature, play a smaller role. Both the gold standard and trade were associated with higher co-movement at the bilateral level during the entire interwar period. We document that fixed exchange rates and trade made a comeback after 1932, but co-movement declined. The fall after 1932 appears to be driven by the rise of smaller blocs based on monetary and trade cooperation and an accompanying fall in co-movement between blocs.

Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:58:y:2011:i:4:p:362-372

DOI: 10.1016/j.jmoneco.2011.07.004

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