Session 4b: The Great Depression—Macro

The Great Depression was a global phenomenon. Therefore, a comparison of the U.S. and Canadian experiences is helpful, because of the close economic ties the two countries share and because of significant differences between the two countries' financial structures. Yet, both countries experienced the Great Depression at roughly the same time and of comparable economic magnitude. The survey finds that a single cause is not responsible for this event. Nevertheless, what is striking is that despite differences in the two countries' financial structures, both countries suffered a tremendous slump. Institutional differences are insufficient to insulate a country from foreign shocks or their role in insufficiently understood. I conclude that the “ideology” of the Gold Standard was significant in overcoming the potential for institutional differences to cushion the blow of the Great Depression in Canada.