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Did International Economic Forces Cause the Great Depression?

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  • Barry Eichengreen.

Abstract

This paper reviews and assesses international explanations for the depth and duration of the Great Depression. Many of the conclusions are negative. The U.S. Smoot-Hawley Tariff Act of 1930 came too late to account for the 1929 downturn and fails to explain the severity of the contraction in the U.S. The competitive devaluations of the 1930s redistributed the Depression's effects across countries but did not worsen it overall. The deflationary consequences of the liquidation of foreign exchange reserves were minor. Domestic central bank policies and their failure to be coordinated internationally must bear the major responsibility for the Depression. Copyright 1988 Western Economic Association International.
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  • Barry Eichengreen., 1987. "Did International Economic Forces Cause the Great Depression?," Economics Working Papers 8751, University of California at Berkeley.
    • Handle: RePEc:ucb:calbwp:8751
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    1. Eichengreen, Barry & Sachs, Jeffrey, 1985. "Exchange Rates and Economic Recovery in the 1930s," The Journal of Economic History, Cambridge University Press, vol. 45(4), pages 925-946, December.
    2. Milton Friedman & Anna J. Schwartz, 1963. "A Monetary History of the United States, 1867–1960," NBER Books, National Bureau of Economic Research, Inc, number frie63-1, January.
    3. Bernanke, Ben S, 1983. "Nonmonetary Effects of the Financial Crisis in Propagation of the Great Depression," American Economic Review, American Economic Association, vol. 73(3), pages 257-276, June.
    4. Eichengreen, Barry & Portes, Richard, 1986. "Debt and default in the 1930s : Causes and consequences," European Economic Review, Elsevier, vol. 30(3), pages 599-640, June.
    5. Epstein, Gerald & Ferguson, Thomas, 1984. "Monetary Policy, Loan Liquidation, and Industrial Conflict: The Federal Reserve and the Open Market Operations of 1932," The Journal of Economic History, Cambridge University Press, vol. 44(4), pages 957-983, December.
    6. Unknown, 1986. "Letters," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 1(4), pages 1-9.
    7. Field, Alexander J., 1984. "A New Interpretation of the Onset of the Great Depression," The Journal of Economic History, Cambridge University Press, vol. 44(2), pages 489-498, June.
    8. Meltzer, Allan H., 1976. "Monetary and other explanations of the start of the great depression," Journal of Monetary Economics, Elsevier, vol. 2(4), pages 455-471, November.
    9. Hamilton, James D., 1987. "Monetary factors in the great depression," Journal of Monetary Economics, Elsevier, vol. 19(2), pages 145-169, March.
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    Cited by:

    1. Richard Higgott & J J Woo & Tim Legrand, 2021. "The demand for IPEand public policy in the governance of global policy design [The emerging regional architecture of world politics]," Policy and Society, Darryl S. Jarvis and M. Ramesh, vol. 40(4), pages 449-466.
    2. Marek A. Dąbrowski, 2015. "Did the Great Deflation of 1929–33 really have to happen? A reconsideration of the inevitability of the Great Deflation view," European Review of Economic History, European Historical Economics Society, vol. 19(3), pages 235-254.
    3. Barry Eichengreen, 1989. "International Monetary Instability Between the Wars: Structural Flaws or Misguided Policies?," NBER Working Papers 3124, National Bureau of Economic Research, Inc.
    4. Gabriel P. Mathy, 2014. "Uncertainty Shocks and Equity Return Jumps and Volatility During the Great Depression," Working Papers 2014-02, American University, Department of Economics.
    5. Eichengreen, Barry, 1989. "International Monetary Istability Between the Wars: Structural Flaws or Misguided Policies?," Department of Economics, Working Paper Series qt5r60q801, Department of Economics, Institute for Business and Economic Research, UC Berkeley.

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