The Last Great Depression of the XXth Century: A Dynamical Approach
Macroeconomics from University Library of Munich, Germany
The dramatic fall in output in eastern Europe in the 90s was a result of the institutional structure imposed by the state - taken here as exogenous - on the production process. Consider therefore an economic system where the state is promoting a policy of 'forced capital formation' to fund a technology which produces higher output. The drawback is that such a system becomes internally unstable: even though economic growth takes place in the short run, in the long run the economy moves into a transition path towards a stable lower income (unless the relationship between the political sector and the economy changes and the state withdraws from the capital formation process). As output loss reached the level of another Great Depression, pecularities of this phenomenon of East Europe can bring new insight into what is triggering great depressions.
Keywords: Great Depression; state; capital formation; growth (search for similar items in EconPapers)
JEL-codes: E (search for similar items in EconPapers)
Pages: 24 pages
New Economics Papers: this item is included in nep-his and nep-mac
Note: Type of Document - pdf; pages: 24
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpma:0510008
Access Statistics for this paper
More papers in Macroeconomics from University Library of Munich, Germany
Bibliographic data for series maintained by EconWPA ().