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Some Observations on the Great Depression in Germany

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  • Weder, Mark

Abstract

This Paper evaluates the role of the demand side during the Great Depression in Germany. From Euler equation residuals we are able to identify a series of contractionary demand shocks that pounded the German economy from 1929-32. We apply the detrimental preference innovations to a dynamic general equilibrium model and find that size and order of shocks can generate a pattern that can explain the lion?s share of the decline in economic activity. The artificial economy also predicts a swift recovery after 1932, thereby questioning significant effects of Nazi economic policy.

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  • Weder, Mark, 2003. "Some Observations on the Great Depression in Germany," CEPR Discussion Papers 3716, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:3716
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    Cited by:

    1. Maurer, Stephan E., 2018. "Voting Behavior and Public Employment in Nazi Germany," The Journal of Economic History, Cambridge University Press, vol. 78(1), pages 1-39, March.
    2. Mark Weder, 2006. "A heliocentric journey into Germany's Great Depression," Oxford Economic Papers, Oxford University Press, vol. 58(2), pages 288-316, April.

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    More about this item

    Keywords

    Demand shocks; Great depression; Germany; Applied dynamic general equilibrium;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-

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