DP4191 A Heliocentric Journey into Germany's Great Depression

Author(s):	Mark Weder
Publication Date:	January 2004
Keyword(s):	applied dynamic general equilibrium, germany, great depression, indeterminacy
JEL(s):	E32, N14
Programme Areas:	International Macroeconomics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=4191

The Paper finds empirical evidence on the ripple effect of sunspots on the interwar German economy. It identifies a sequence of negative shocks to expectations for the 1927-32 period. The artificial economy predicts the 1928-32 depression and a long boom from 1933 onwards. Overall, a tangible fraction of interwar output volatility is attributed for by sunspots.