Devaluation, exports, and recovery from the Great Depression

Jason Lennard and Meredith Paker

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper evaluates how a major policy shift – the suspension of the gold standard in September 1931 – affected employment outcomes in interwar Britain. We use a new high-frequency industry-level dataset and difference-in-differences techniques to isolate the impact of devaluation on exporters. At the micro level, the break from gold reduced the unemployment rate by 2.7 percentage points for export-intensive industries relative to non-export industries. At the aggregate level, this effect stimulated the labor market, the fiscal outlook, and economic growth. Devaluation was therefore an important initial spark of recovery from the depths of the Great Depression.

Keywords: exports; gold standard; interwar Britain; unemployment (search for similar items in EconPapers)
JEL-codes: E24 F41 J64 N14 (search for similar items in EconPapers)
Date: 2024-12-19
New Economics Papers: this item is included in nep-his, nep-int and nep-lab
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Published in Journal of Economic History, 19, December, 2024. ISSN: 0022-0507

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http://eprints.lse.ac.uk/126517/ Open access version. (application/pdf)

Related works:
Working Paper: Devaluation, Exports, and Recovery from the Great Depression (2023)
Working Paper: Devaluation, Exports, and Recovery from the Great Depression (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:126517

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