The Great Depression in Italy: Trade Restrictions and Real Wage Rigidities

Fabrizio Perri and Vincenzo Quadrini

Review of Economic Dynamics, 2002, vol. 5, issue 1, 128-151

Abstract: In Italy, as in many other countries, the years immediately after 1929 were characterized by a major slowdown in economic activity. We argue that the depth and duration of the crisis cannot be explained solely by productivity shocks. We present a model in which trade restrictions together with wage rigidities produce a significant slowdown in economic activity. The model is also consistent with evidence from sectoral disaggregated data. Our model predicts that trade restrictions can account for about one-half of the slowdown observed in the data while real wage rigidities can account for one-fourth of it. (Copyright: Elsevier)

Keywords: Great Depression; Italy; trade (search for similar items in EconPapers)
JEL-codes: E30 F40 N24 (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (39)

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Working Paper: Data Appendix to The Great Depression in Italy: Trade Restrictions and Real Wage Rigidities (2002)
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DOI: 10.1006/redy.2001.0144

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