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Discussion Paper Details

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Title: The Ends of 30 Big Depressions

Author(s): Martin Ellison, Sang Seok Lee and Kevin Hjortsh�j O'Rourke

Publication Date: July 2020

Keyword(s): gold standard, Great Depression and inflationary expectations

Programme Area(s): Economic History, International Macroeconomics and Finance and Monetary Economics and Fluctuations

Abstract: How did countries recover from the Great Depression? In this paper we explore the argument that leaving the gold standard helped by boosting inflationary expectations and lowering real interest rates. We do so for a sample of 30 countries, using modern nowcasting methods and a new dataset containing more than 230,000 monthly and quarterly observations for over 1,500 variables. In those cases where the departure from gold happened on clearly defined dates, it seems clear that inflationary expectations rose in the wake of departure. IV regressions and synthetic matching techniques suggest that the relationship is causal.

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Bibliographic Reference

Ellison, M, Lee, S and O'Rourke, K. 2020. 'The Ends of 30 Big Depressions'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=15061