IDEAS home Printed from https://ideas.repec.org/p/kud/kuiedp/9704.html
   My bibliography  Save this paper

Uncertainty and Durable Consumption in the Great Depression

Author

Listed:
  • João Miguel Ejarque

    (Institute of Economics, University of Copenhagen)

Abstract

This paper investigates Romer's (1990) hypothesis linking uncertainty caused by the October 1929 crash with durable expenditure movements and the start of the downturn. The author estimates conditional variances for macroeconomic data, and computes the variance of stock returns. These goods are subject to different degrees of irreversibility. The response to a mean preserving spread implies a relative increase in investment in the less irreversible good -- in this case consumer durables. Therefore, a drop in durable consumption can be a sign of recession only because investment in physical capital is falling even more. However, there is no clear evidence supporting this implication, following the October crash.

Suggested Citation

  • João Miguel Ejarque, 1997. "Uncertainty and Durable Consumption in the Great Depression," Discussion Papers 97-04, University of Copenhagen. Department of Economics.
    • Handle: RePEc:kud:kuiedp:9704
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Saito, Makoto & Shiratsuka, Shigenori, 2003. "Precautionary Motives versus Waiting Options: Evidence from Aggregate Household Saving in Japan," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 21(3), pages 1-20, October.

    More about this item

    Keywords

    uncertainty; irreversibility; Great Depression; durables; investment;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kud:kuiedp:9704. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Thomas Hoffmann (email available below). General contact details of provider: https://edirc.repec.org/data/okokudk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.