|
Featured Article: Roosevelt's Recession: A Historical and Econometric Examination of the Roots of the 1937 Recession
The 1937 Recession is a lesser-known event overshadowed by the Stock Market Crash of 1929 and the Great Depression. Nonetheless, it is a subject of deep interest because it brought about an uncommonly sharp economic downturn during the depression recovery period. A study of 1937 provides the unique opportunity to examine the casual contributing role, if any, of the historically unprecedented recovery efforts enacted by President Franklin Delano Roosevelt in 1933.
To set the stage, Figure 1 plots real gross domestic product (GDP) between the years 1935 and 1938. During the Recession, GDP declined nearly 10%.
Figure 1. Real GDP in Chained 1937 Dollars. Source: The End of the Great Depression 1939-41, by Robert J. Gordon and Robert Krenn
Industrial production output data allows for a more nuanced examination of the Recession’s impact. Figure 2 plots the NBER’s industrial production index, an indicator that measures the output of manufacturing, mining, and electric and gas utility production facilities. The solid grey line is a plot of the index between March 1933 and December 1940. The dashed line, provided for comparative purposes, plots industrial production during the 2008 Great Recession recovery period.
The years 1937 and 1938 should have been defined by continued recovery from the nation’s worst economic collapse. For reasons to be explored, overly optimistic policymakers and outspoken and disagreeing economists made key mistakes leading to the Recession. Confusion, a lack of theories, and ideological barriers jointly contributed to the downturn. A comprehensive understanding of society, politics, and economic thought during the decade prior to the Recession is required to understand the unprecedented and contested factors that contributed to its onset. The policymakers at the root of these factors made decisions that brought about one of the most unique downturns in American economic history.
___________
This study begins by turning the focus away from 1937 and gazing back to the onset of the Great Depression, starting with President Herbert Hoover’s time in office. Subsequently, this study examines the state of economic thought during the Recession and the development of new theories in response to the Great Depression. Finally, the project ends with a quantitative analysis that was recurrently complemented by the historical knowledge amassed.
Given that the varied recovery efforts that followed the Great Depression make it difficult to isolate the causes of the 1937 Recession, the little economic literature on this topic has yet to reach a point of general consensus. While some texts contribute the downturn only to fiscal policy changes, others consider monetary policy as the only cause. This study finds both views to be valid. Only in the context of diminished government spending was monetary policy able to have an impact great enough to lead to the Recession.
Figure 2. Recovery Relative to Previous Peak, 1929 and 2007. Data adapted from: Board of Governors of the Federal Reserve System (US), Industrial Production Index [INDPRO] retrieved from FRED, Federal Reserve Bank of St. Louis.
Despite having gained the label of “do-nothing President” from his opponents across the aisle, President Hoover took a surprisingly proactive approach to addressing the alarming conditions that resulted from the Stock Market Crash of 1929. Hoover’s recovery efforts served as the foundation of President Roosevelt’s New Deal. Hoover "understood the importance of stimulating aggregate demand in a depressed economy and the economic policies he pressed for were intended for that purpose.” However, given his political philosophy and the social climate of the time, he believed that recovery required limited government intervention; he considered monetary policy as the only tool at his disposal. Rexford Tugwell, one of the architects of the New Deal, highlights the extent to which Hoover built the foundations for recovery by saying, “The ideas embodied in the New Deal legislation were a compilation of those which had come to maturity under Hoover’s aegis… all of us owed much to Hoover, [especially] for his enlargements of knowledge, for his encouragement to scholars, for his organization of research.” Tugwell continues, “The brains trust got much of its material from the Hoover committees or from work done under their auspices” Hoover’s dedication to research-backed policy decisions was a trait he brought to the White House from prior posts.
Before his time in the White House, Hoover served as the third Secretary of Commerce from 1921 to 1928. Although the position was considered one of the least prestigious cabinet posts, Hoover used his seat as a platform to advocate for issues outside of the traditional scope of his position.
During his first two years as Secretary, Hoover lobbied for restrictions on foreign lending. Hoover was concerned about the rise in foreign investment because he believed that “our citizens… have had but little experience in international investment.” Between the years 1924 and 1929, American foreign lending totaled $6.429 billion. During that same period, total British foreign lending was only $3.3 billion.
The surge in foreign lending was the result of the 1913 Federal Reserve Act and financial sector ingenuity. Prior to the Federal Reserve Act, national banks in the United States were prohibited from opening branches abroad. The Act ended this prohibition, and the number of bank branches in foreign countries soared from 26 in 1914 to 181 in 1920. The new foreign branches gave international borrowers easier access to American lenders. In addition to international expansion, the increase in foreign investment was also tied to a financial instrument first introduced in 1921: the investment trust. Like the modern mutual fund, an investment trust pooled client contributions and invested the pooled fund on behalf of the clients. The use of the investment trust as a financial instrument started in Britain, where trusts traditionally invested in foreign bonds. When the instrument made its debut in the United States, the focus on foreign bonds was retained.
Responding to the increases in foreign investment, Secretary Hoover ordered the Commerce Department to assess foreign investments. With the new mandate, the Department provided economic condition summaries and investment project information to hundreds of U.S. banks. However, the assessments did little to alleviate Hoover’s concerns. Even during his Presidency, Hoover was worried about over-investment, both nationally and abroad. Unlike many of his contemporaries, he believed that the market was overvalued.
As President, Hoover felt it was pertinent to caution the public about the dubious increase in market values. In early 1929, he instructed Treasury Secretary Andrew Mellon to provide the public with investment advice. Following Hoover’s directive, on March 14, 1929, Mellon made a public statement encouraging investors to look beyond corporate stocks. Mellon announced, “The present situation in the financial market offers an opportunity for the prudent investor to buy bonds,” and he pointedly continued, “bonds are low in price compared to stocks.”
An aspect central to Hoover’s concern about the market was the method underlying the expansion in stock purchases. As stock values inflated, and as more Americans flocked to the market in hopes of earning easy money, the financing of stock purchases became commonplace. Individuals willing to take out a loan could now easily invest more than they would otherwise have been able to afford. By September 1929, outstanding broker’s loans obtained by NYSE members totaled $8.5 billion. The value of loans outstanding had nearly doubled in less than two years. Figure 3 shows the rise in the value of broker’s loans outstanding.
Figure 3. Outstanding Broker's Loans. Data adapted from: “Statistical Abstract,” 279.
For comparison to modern day amounts, the value of outstanding broker’s loans in 1928 represented the value of 8% of 1929 GDP. To relate these numbers to values today, 8% of GDP in 2014 represents $1.28 trillion. As these figures show, the value of broker’s loans outstanding in the year 1929 was an extraordinarily high amount. As time will tell, the vast amount of money tied up in these un-discountable and risky loans contributed, in part, to a banking crisis that brought the financial system to its knees.
It is important to note that concern over security speculation had long existed outside of the President Hoover’s office. In its annual report for the year 1923, the Federal Reserve Board discussed, at length, recommended credit policy. The discussion underscored the importance of “productive,” or non-speculative, uses of credit. The Board warned that a speculation in commodity stocks could produce disequilibrium between production and consumption:
The characteristic of the good functioning of the credit system is to be found in the promptness and in the degree with which the flow of credit adapts itself to the orderly flow of goods in industry and trade. So long as this flow is not interrupted by speculative interference there is little likelihood of the abuse of credit supplied by the Federal reserve banks and consequently little danger of the undue creation of new credit...It is the nonproductive use of credit that breeds unwarranted increase in the volume of credit; it also gives rise to unnecessary maladjustment between the volume of production and the volume of consumption, and is followed by price and other economic disturbances.
However, it took the Federal Reserve Board half a decade to apply their 1923 speculation doctrine. It wasn’t until their 1929 report that the Board devoted significant discussion to the rampant security speculation. A contemporary student of economics may be surprised to discover that, before the 1929 crash, opinion was sharply divided among economists and policymakers about the nature of stock prices. The disagreement regarding speculation is best highlighted in an infamous address given by Irving Fisher, a renowned economist and leading figure in the field. On October 15, 1929, during a speech in New York City before the Purchasing Agents Association, Fisher assured audience members and other stakeholders that, despite what others are saying, stocks have reached "what looks like a permanently high plateau.” Fisher’s prediction stood the test of time for less than ten days.
The Stock Market Crash of 1929 is considered by most to be the start of the Depression. However, some economists believe that the crash should not have had an impact outside of the stock market. Milton Friedman, in an interview for Newsweek in 1970, simply stated, “Whatever happens to the stock market, it cannot lead to a great depression unless it produces or is accompanied by a monetary collapse.”
Friedman’s statement in Newsweek reflects the conclusion that he and Anna Schwartz reached in their groundbreaking and contested 1963 book, A Monetary History of the United States, 1867-1960. Chapter Seven of their book, “The Great Contraction,” argues that the 1929 stock market crash would not have led to a downturn as long and as painful as the Great Depression had the Federal Reserve not presided over a contraction of the money supply. They state, “The monetary collapse was not the inescapable consequence of other forces, but a largely independent factor which exerted a powerful influence on the course of events.”
A series of banking crises between 1930 and 1933 brought about the collapse of the financial system. Given the structure of the American banking system, bank failures and bank runs occurred with regular frequency in the decades before the Depression. Bank failures were often hyper-local events that affected small banks in rural areas. However, the three banking crises that occurred between 1930 and 1933 were unprecedented due to their sequential timing and the large sum of currency held by the suspended banks.
The first baking crisis began during October of 1930 and tapered off in early 1931. During this period, bank failures peaked in November and December. In November, 256 banks, with total deposits of $180 million, failed. The following month ushered in the failure of 352 banks, with total deposits of over $370 million. The deposits of suspended banks in November 1930 alone were more than double the previously recorded maximum, since the onset of monthly data recording in 1921. The most dramatic of the bank failures during the first crisis was the collapse of the Bank of United States on December 11, 1930. With over $200 million in deposits amongst its 440,000 depositors, the failure of this New York City-based bank represented the largest commercial bank failure, as measured by deposits, in American history.
Just months after the stock market crash, towards the end of the first banking crisis, economists and policymakers predicted the onset of recovery. Upticks in certain economic indicators led many to conclude that the worst had passed. James A. Farrell, President of U.S. Steel, proclaimed in January 1931, “The peak of the depression passed thirty days ago.” In the first few months of 1931, industrial production rose, and factory employment was declining at a lower rate. However, these slight upticks weren’t enough to increase public confidence. The total value of deposits in suspended banks started increasing after March 1931: a second banking crisis was unfolding.Continued on Next Page »
An Act to Diminish the Causes of Labor Disputes Burdening or Obstructing Interstate and Foreign Commerce, to Create a National Labor Relations Board, and for Other Purposes., Pub. L. No. 74-198, Stat. (July 5, 1935). Accessed January 16, 2015. http://research.archives.gov/description/299843.
An act to provide adjusted compensation for veterans of the World War, and for other purposes., H.R. 10874, 67th Cong., 2d Sess. (1922).
Adjusted Compensation Payment Act, ch. 32, 49 Stat. 1099-1102 (Jan. 27, 1936).
Allen, William R. "Irving Fisher, F. D. R., and the Great Depression." History of Political Economy 9, no. 4 (1977): 560-87. http://EconPapers.repec.org/RePEc:hop:hopeec:v:9:y:1977:i:4:p:560-587.
Baker, Nancy. "Abel Meeropol (a.k.a. Lewis Allan): Political Commentator and Social Conscience." American Music 20, no. 1 (Spring 2002): 25-79.
Barber, William J. From New Era to New Deal: Herbert Hoover, the Economists, and American Economic Policy, 1921-1933. Cambridge: Cambridge University Press, 1988.
Black, Conrad. Franklin Delano Roosevelt: Champion of Freedom. New York: Public Affairs, 2003.
Board of Governors of the Federal Reserve System (US), Industrial Production Index[INDPRO], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/INDPRO/, April 4, 2015.
Brown, E. Cary. "Fiscal Policy in the 'Thirties: A Reappraisal." The American Economic Review 46, no. 5 (December 1956): 857-79.
The Brownsville Herald (Brownsville, TX). "Prices." April 2, 1937, 1.
The Brownsville Herald (Brownsville, TX). "Public Funds Will Control High Prices?" April 4, 1937, 1-2.
Burns, Arthur F., and Wesley C. Mitchell. Measuring Business Cycles. Studies in Business Cycles 2. New York: National Bureau of Economic Research, 1946.
Cargill, Thomas F., and Thomas Mayer. "The Effect of Changes in Reserve Requirements during the 1930s: The Evidence from Nonmember Banks." The Journal of Economic History 66, no. 2 (June 2006): 417-32.
Cole, Harold L., and Lee E. Ohanian. "New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis." Journal of Political Economy 112, no. 4 (August 2004): 779-816. Accessed January 16, 2015. doi:10.1086/421169.
Complete Set of Speech Drafts. Volume 97: November 10, 1937. Diaries of Henry Morgenthau, Jr. Franklin D. Roosevelt Presidential Library & Museum, Hyde Park, NY.
Conference to Talk Over Plans, 9/13/37. Volume 95: November 10, 1937; Page 1. Diaries of Henry Morgenthau, Jr. Franklin D. Roosevelt Presidential Library & Museum, Hyde Park, NY.
"Document 50: February 28, 1938, Letter with Attachments, To: Keynes From: Roosevelt." In FDR's Response to Recession, edited by George McJimsey, 303-12. Vol. 26 of Documentary History of the Franklin D. Roosevelt Presidency. N.p.: University Publications of America, 2005.
Draft Letter to FDR. November 3, 1937. Volume 94: November 1-November 10, 1937; Page 47. The Diaries of Henry Morgenthau, Jr. Franklin D. Roosevelt Presidential Library & Museum, Hyde Park, NY.
Dutcher, Rodney. "Behind the Scenes in Washington." The Brownsville Herald (Brownsville, TX), April 2, 1937, 4.
Edsforth, Ronald. The New Deal: America's Response to the Great Depression. Malden, MA: Blackwell Publishers, 2000.
Eggertsson, Gauti B. Great Expectations and the End of the Depression. Staff Report no. 234. N.p.: Federal Reserve Bank of New York, 2005.
———. "Great Expectations and the End of the Depression." American Economic Review 98, no. 4 (September 2008): 1476-516. doi:10.1257/aer.98.4.1476.
Eggertsson, Gauti B., and Benjamin Pugsley. "The Mistake of 1937: A General Equilibrium Analysis." Monetary and Economic Studies 24, nos. S-1 (December 2006): 151-90.
Eichengreen, Barry. "The U.S. Capital Market and Foreign Lending, 1920–1955." In Developing Country Debt and Economic Performance: The International Financial System, by Susan Margaret Collins and Jeffrey Sachs, 107-56. Vol. 1. Chicago: University of Chicago Press, 1989. Previously published as "Til Debt Do Us Part: The U.S. Capital Market and Foreign Lending, 1920-1955." NBER Working Paper W2394. http://www.nber.org/chapters/c8988.
"FDR: From Budget Balancer to Keynesian, A President's Evolving Approach to Fiscal Policy in Times of Crisis." Franklin D. Roosevelt Presidential Library and Museum. http://www.fdrlibrary.marist.edu/aboutfdr/budget.html.
Federal Reserve Board. Tenth Annual Report of the Federal Reserve Board: Covering Operations for the Year 1923. Washington: Government Printing Office, 1924. Accessed November 23, 2014. https://fraser.stlouisfed.org/docs/publications/arfr/1920s/arfr_1923.pdf.
Fisher, Irving. Booms and Depressions: Some First Principles. New York: Adelphi, 1932.
———. "The Debt-Deflation Theory of Great Depressions." Econometrica 1, no. 4 (October 1933): 337-57. DOI:10.2307/1907327.
———. "Dollar Stabilization." In Encyclopedia Britannica, 852-53. Vol. XXX. http://www.econlib.org/library/Essays/fshEnc1.html.
———. "Mathematical Investigations in the Theory of Value and Prices." Transactions of the Connecticut Academy of Arts and Sciences 9 (1892): 1-124.
———. "Our Unstable Dollar and the So-Called Business Cycle." Journal of the American Statistical Association 20, no. 150 (June 1925): 179-202. doi:10.2307/2277113.
———. "Stabilizing Price Levels." The New York Times, September 2, 1923, sec. XX, 10.
———. "Why Has the Doctrine of Laissez Faire Been Abandoned?" Science, n.s., 25, no. 627 (January 4, 1907): 18-27. http://www.jstor.org/stable/1633692.
Friedman, Milton, Paul A. Samuelson, and Henry Wallich. "How the Slump Looks to Three Experts." Newsweek, May 25, 1970, 78-79. Accessed November 23, 2014. http://hoohila.stanford.edu/friedman/newsweek.php.
Friedman, Milton, and Anna Jacobson Schwartz. A Monetary History of the United States 1867-1960. 9th ed. Princeton: Princeton University Press, 1993.
Gordon, Robert J., and Robert Krenn. "New Gordon-Krenn quarterly and monthly data set for 1913-54." Unpublished raw data, Northwestern University, n.d. Accessed March 30, 2015. http://faculty-web.at.northwestern.edu/economics/Gordon/researchhome.html.
Hearings Before the Banking, Housing, and Urban Affairs (2009) (statement of Lee E. Ohanian). Accessed January 25, 2015. http://www.banking.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=6cce4fbb-e7cd-4699-8892-9c5d1285e871.
Hemingway, Ernest. "Who Murdered the Vets?" The New Masses, September 17, 1935, 9-10. Accessed March 10, 2015. http://www.unz.org/Pub/NewMasses-1935sep17-00009.
Hobsbawm, E. J. Industry and Empire: The Birth of the Industrial Revolution. Edited by Chris Wrigley. New York: New Press, 1999. Originally published as Industry and Empire: An Economic History of Britain Since 1750 (London: Weidenfeld & Nicolson, 1968).
Jones & Laughlin Steel Corp. v. NLRB, 301 U.S. (1937). Accessed January 16, 2015. https://supreme.justia.com/cases/federal/us/301/1/case.html.
Kahn, Richard. "The Relation of Home Investment to Unemployment." The Economic Journal 41, no. 162 (June 1931): 173-98.
Keynes, John Maynard. "Chapter 24: Concluding Notes on the Social Philosophy towards Which the General Theory Might Lead." In The General Theory of Employment, Interest, and Money.
———. "The Great Slump of 1930." The Nation and Athenaeum 48 (December 20, 1930): 402.
———. "The Great Slump of 1930 II." The Nation and Athenaeum 48 (December 27, 1930): 427-28.
———. A Tract on Monetary Reform. 1923. Reprint, London: Macmillan, 1924.
Kindleberger, Charles Poor. The World in Depression, 1929-1939. Berkeley: University of California Press, 1973.
May, Dean L. From New Deal to New Economics: The Liberal Response to the Recession. Edited by Frank Freidel. Modern American History. New York: Garland Publishing, 1981.
Mehrotra, Ajay K. "Edwin R.A. Seligman and the Beginnings of the U.S. Income Tax." Tax Notes, November 14, 2005, 933-50.
Nasar, Sylvia. Grand Pursuit: The Story of Economic Genius. New York: Simon & Schuster, 2011.
NBER. The End of the Great Depression 1939-41: Policy Contributions and Fiscal Multipliers. By Robert J. Gordon and Robert Krenn. Working Paper no. 16380. 2010. Accessed March 30, 2015. doi:10.3386/w16380.
The New York Times. "Bonus Bill Becomes Law." January 28, 1936, Late City edition, 1. Accessed March 8, 2015. http://timesmachine.nytimes.com/timesmachine/1936/01/28/87903226.html?pageNumber=1.
The New York Times. "Both Coasts Threatened." September 3, 1935, Late City edition, 1. Accessed March 8, 2015. http://timesmachine.nytimes.com/timesmachine/1935/09/03/issue.html.
The New York Times. "Fisher Sees Stocks Permanently High." October 16, 1929, 8.
The New York Times. "Link Bonus Issue to Florida Deaths." September 15, 1935, Late City edition, N6. Accessed March 8, 2015. http://timesmachine.nytimes.com/timesmachine/1935/09/15/93707816.html?pageNumber=99.
The New York Times. "The Stock Market." October 20, 1937, Late City edition, 22. Accessed March 8, 2015. http://timesmachine.nytimes.com/timesmachine/1937/10/20/103216107.html?pageNumber=22.
The New York Times. "Veteran's Camp Wrecked by Storm." September 4, 1935, Late City edition, 1. Accessed March 8, 2015. http://timesmachine.nytimes.com/timesmachine/1935/09/04/93481928.html.
The New York Times. "Veterans Lead Fatalities. Only 11 of 192 Reported as Left Alive in One Florida Camp." September 5, 1935, Late City edition, 1. Accessed March 8, 2015. http://timesmachine.nytimes.com/timesmachine/1935/09/05/93482496.html?pageNumber=1.
Office of the Secretary of the Senate, Presidential Vetoes, 1789-1988, S. Doc. No. 102-12 (1992). Accessed March 8, 2015. http://www.senate.gov/reference/resources/pdf/presvetoes17891988.pdf.
"131 'I Pledge You—I Pledge Myself to a New Deal for the American People.' the Governor Accepts the Nomination for the Presidency, Chicago, Ill. July 2, 1932." In The Genesis of the New Deal, 1928-1932, 647-58. Vol. 1 of The Public Papers and Addresses of Franklin D. Roosevelt. New York: Random House, 1938.
Papadimitriou, Dimitri B., and Greg Hannsgen. Lessons from the New Deal: Did the New Deal Prolong or Worsen the Great Depression? Working Paper no. 581. Annandale-on-Hudson, NY: Levy Economics Institute of Bard College, 2009.
Personal Memo. October 19, 1937. Volume 92: October 12-October 19, 1937; Page 229. The Diaries of Henry Morgenthau, Jr. Franklin D. Roosevelt Presidential Library & Museum, Hyde Park, NY.
"Press Conference #425-15." January 14, 1938. Press Conferences of President Franklin D. Roosevelt, 1933-1945. Franklin D. Roosevelt Presidential Library & Museum, Hyde Park, NY.
"Press Conference #434." February 15, 1938. Press Conferences of President Franklin D. Roosevelt, 1933-1945. Franklin D. Roosevelt Presidential Library & Museum.
Press Conference #401-1. October 8, 1937. Press Conferences of President Franklin D. Roosevelt, 1933-1945. Franklin D. Roosevelt Presidential Library & Museum, Hyde Park, NY.
"Press Conference #405-5." October 22, 1937. Press Conferences of President Franklin D. Roosevelt, 1933-1945. Franklin D. Roosevelt Presidential Library & Museum, Hyde Park, NY.
"Press Conference #409-7." November 9, 1937. Press Conferences of President Franklin D. Roosevelt, 1933-1945. Franklin D. Roosevelt Presidential Library & Museum, Hyde Park, NY.
"Press Conference #415-8." December 10, 1937. Press Conferences of President Franklin D. Roosevelt, 1933-1945. Franklin D. Roosevelt Presidential Library & Museum, Hyde Park, NY.
"Press Conference #416-4." December 14, 1937. Press Conferences of President Franklin D. Roosevelt, 1933-1945. Franklin D. Roosevelt Presidential Library & Museum, Hyde Park, NY.
"Press Conference #357." April 2, 1937. Page 239. Press Conferences of President Franklin D. Roosevelt, 1933-1945. Franklin D. Roosevelt Presidential Library & Museum.
Romer, Christina D. "Lessons from the Great Depression for Economic Recovery in 2009." Speech presented at Brookings Institution, Washington D.C., March 9, 2009. Accessed April 21, 2015. http://www.brookings.edu/~/media/events/2009/3/09-lessons/0309_lessons_romer.pdf.
———. "Spurious Volatility in Historical Unemployment Data." Journal of Political Economy 94, no. 1 (February 1986): 1-37. http://www.jstor.org/stable/1831958.
———. "What Ended the Great Depression?" The Journal of Economic History 52, no. 4 (December 1992): 757-84.
Roose, Kenneth D. The Economics of Recession and Revival: An Interpretation of 1937-38. Yale Studies in Economics 2. New Haven: Yale University Press, 1954.
———. "The Recession of 1937-38." Journal of Political Economy 56, no. 3 (June 1948): 239-48. Accessed January 26, 2015. http://www.jstor.org/stable/1825772.
———. "The Role of Net Government Contribution to Income in the Recession and Revival of 1937-38." The Journal of Finance 6, no. 1 (March 1951): 1-18. DOI:10.1111/j.1540-6261.1951.tb04437.x.
Roosevelt, Franklin D. "Annual Budget Message to Congress." Address, January 7, 1937. The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=15337.
———. "Annual Message to Congress." Address, January 6, 1937. The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=15336.
———. "Fireside Chat on Banking." Speech, March 12, 1933. The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=14540.
———. "Message to Congress Recommending Legislation, November 5, 1937." The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=15496.
———. "Proclamation 2040 - Bank Holiday." The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=14485.
———. "Proclamation 2039 - Declaring Bank Holiday." The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=14661.
———. "60 - Message to Congress on Appropriations for Work Relief for 1938. April 20, 1937." The American Presidency Project. Accessed March 19, 2015. http://www.presidency.ucsb.edu/ws/?pid=15393.
———. "Statement Summarizing the 1938 Budget, October 19, 1937." The American Presidency Project. Accessed March 22, 2015. http://www.presidency.ucsb.edu/ws/?pid=15486.
Schumpeter, Joseph A. "Chapter 5.4: Unemployment and the ‘State of the Poor’." In History of Economic Analysis, 258-63. Edited by Elizabeth B. Schumpeter. New York: Oxford University Press, 1954.
Shlaes, Amity. The Forgotten Man: A New History of the Great Depression. New York: Harper Collins, 2007.
Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. Edited by Edwin Cannan. 5th ed. 1776. Reprint, London: Methuen & Co., 1904. http://www.econlib.org/library/Smith/smWN.html.
Telser, Lester G. "Higher Member Bank Reserve Ratios in 1936 and 1937 Did Not Cause the Relapse into Depression." Journal of Post Keynesian Economics 24, no. 2 (Winter 2001-2): 205-16.
———. "The Veterans' Bonus of 1936." Journal of Post Keynesian Economics 26, no. 2 (Winter 2003-4): 227-43.
Three Parts of Speech as Decided Upon, 10/28/37. Volume 95: November 10, 1937; Page 261. Diaries of Henry Morgenthau, Jr. Franklin D. Roosevelt Presidential Library & Museum, Hyde Park, NY.
The Times-Picayune (New Orleans, LA). "A Cloud That's Dragonish." January 8, 1937, 12.
The Times-Picayune (New Orleans, LA). "Industry Pushes up after Holiday Lull; Steel Leads." January 11, 1937, 18.
Transcript of Call between Morgenthau and Burgess. October 19, 1937. Volume 92: October 12-October 19, 1937; Page 222. The Diaries of Henry Morgenthau, Jr. Franklin D. Roosevelt Presidential Library & Museum, Hyde Park, NY.
Transcript of Phone Call between Morgenthau and FDR. October 20, 1937. Volume 93: October 20-October 31, 1937; Page 21. The Diaries of Henry Morgenthau, Jr. Franklin D. Roosevelt Presidential Library & Museum, Hyde Park, NY.
United States Senate Special Committee on the Termination of the National Emergency. Emergency Powers Statutes: Provisions of Federal Law Now in Effect Delegating to the Executive Extraordinary Authority in Time of National Emergency. Report no. 93-549. Washington: Government Printing Office, 1973.
U.S. Department of Commerce Bureau of Foreign and Domestic Commerce. Statistical Abstract of the United States 1934. Washington: Government Printing Office, 1934. Accessed November 23, 2014. https://fraser.stlouisfed.org/docs/publications/stat_abstract/1930s/sa_1934.pdf.
Velde, François. "The Recession of 1937—A Cautionary Tale." Economic Perspectives 33, no. 4 (2009): 16-37.
Wood, Howard. "Stocks Crash to New Lows; Selling Swamps Market; Blame Federal Policies." Chicago Daily Tribune, October 19, 1937, Final edition, 1. Accessed March 10, 2015. http://archives.chicagotribune.com/1937/10/19/page/1/article/stocks-crash-to-new-lows.
World War Adjusted Compensation Act, ch. 157, 43 Stat. 121-131 (May 19, 1924). Accessed March 7, 2015. http://www.loc.gov/law/help/statutes-at-large/68th-congress/c68.pdf.
Yale University. "Past Presidents." Office of the President. Accessed December 7, 2014. http://president.yale.edu/past-presidents.
Endnotes
- Real GDP is a measure of economic output that is adjusted for price changes at each observation year. The values in Figure 1 are in terms of 1937 dollars.
- The data was made relative to the pre-Depression peak in industrial production, which occurred in the year 1929. In other words, the data was adjusted so that the 1929 peak equals 100%.
- Barber, From New Era to New Deal, 118.
- Ibid.,195.
- Ibid., 36.
- Kindleberger, The World in Depression, 56.
- Eichengreen, "The U.S. Capital Market," in Developing Country Debt and Economic, 1:122.
- Ibid.
- Ibid., 1:124.
- Barber, From New Era to New Deal, 72.
- Ibid., 73.
- U.S. Department of Commerce Bureau of Foreign and Domestic Commerce, Statistical Abstract of the United, 279.
- According to data obtained from the BEA, GDP in 1929 was $104.6 Billion and 2014 Q2 GDP is $16,010 Billion.
- Federal Reserve Board, Tenth Annual Report of the Federal, 34.
- Friedman and Schwartz, A Monetary History of the United, 254.
- Fisher Sees Stocks Permanently High,” The New York Times, October 16, 1929.
- Friedman, Samuelson, and Wallich, "How the Slump Looks to Three Experts," Newsweek, May 25, 1970.
- The money supply refers to money available for use and circulating in the economy. Varying standardized measures of the money supply exist, from most liquid measurement of money to least liquid.
- Friedman and Schwartz, A Monetary History of the United, 300.
- Ibid., 308.
- Ibid., 310.
- Edsforth, The New Deal: America's, 43.
- Ibid., 40.
- Friedman and Schwartz, A Monetary History of the United, 313.
- Ibid., 315-317.
- Ibid., 322.
- Ibid., Table A-1, 713.
- Black, Franklin Delano Roosevelt: Champion, 269.
- Roosevelt, "Proclamation 2039 - Declaring," The American Presidency Project.
- Roosevelt, "Proclamation 2040 - Bank," The American Presidency Project.
- United States Senate Special Committee on the Termination of the National Emergency, Emergency Powers Statutes: Provisions, 4-5.
- Roosevelt, "Fireside Chat on Banking," The American Presidency Project.
- Friedman and Schwartz, A Monetary History of the United, 311.
- Ibid., 312.
- Hobsbawm, Industry and Empire: The Birth, 190.
- Say’s Law is the defunct notion that production is itself the source of demand. An individual producer is paid for their services and that payment is used to purchase other goods.
- Keynes, "The Great Slump of 1930," 402.
- Nasar, Grand Pursuit: The Story, 323.
- "131 'I Pledge You—I," in The Genesis of the New Deal, 651.
- Ibid., 652.
- Ibid., 658.
- Schumpeter, "Unemployment and the ‘State of the Poor’," inHistory of Economic Analysis.
- A concise history of Progressive-Era economic policy reform efforts, specifically that of public finance, is provided in: Ajay K. Mehrotra, "Edwin R.A. Seligman and the Beginnings of the U.S. Income Tax,"Tax Notes, November 14, 2005.
- Keynes, "The Great Slump of 1930," 402.
- Ibid.
- Keynes, "The Great Slump of 1930, II" 428.
- Smith, An Inquiry into the Nature, IV.2.9.
- Nasar, Grand Pursuit: The Story, 149.
- "Past Presidents," Office of the President.
- Nasar, Grand Pursuit: The Story, 150.
- Ibid., 151.
- Ibid.
- Fisher, "Why Has the Doctrine," 27.
- Nasar, Grand Pursuit: The Story, 283.
- Keynes, A Tract on Monetary, 187.
- Fisher, "Dollar Stabilization.," in Encyclopedia Britannica, XXX.
- Friedman and Schwartz, A Monetary History of the United, 206.
- Ibid., 226-233.
- Romer, "Spurious Volatility in Historical," 31.
- Nasar, Grand Pursuit: The Story, 301.
- Irving Fisher, "Stabilizing Price Levels," The New York Times, September 2, 1923.
- Fisher, "Our Unstable Dollar and the So-Called," 201.
- Fisher, "The Debt-Deflation Theory of Great," 342.
- Fisher, Booms and Depressions: Some, 142.
- Allen, "Irving Fisher, F. D. R., and the Great," 576.
- Ibid., 562.
- Ibid., 580-581.
- Ibid., 577.
- Ibid., 565.
- Ibid., 565.
- Fisher’s latter comment is in regards to the 17% increase in nominal wages between November 1936 and November 1937, as measured by the Bureau of Labor Statistics and the National Industrial Conference Board (Velde, "The Recession of 1937—A," 29).
- Nasar, Grand Pursuit: The Story, 319.
- Ibid., 326.
- Ibid., 324.
- Richard Kahn, "The Relation of Home Investment to Unemployment," The Economic Journal 41, no. 162 (June 1931)
- "FDR: From Budget Balancer to Keynesian,” Franklin D. Roosevelt Presidential Library and Museum, http://www.fdrlibrary.marist.edu/aboutfdr/budget.html.
- Kindleberger, The World in Depression, 262.
- An act to provide adjusted compensation for veterans of the World War, and for other purposes., H.R. 10874, 67th Cong., 2d Sess. (1922). Office of the Secretary of the Senate, Presidential Vetoes, 1789-1988, S. Doc. No. 102-12 (1992), 225.
- Ibid., 228.
- World War Adjusted Compensation Act, ch. 157, 43 Stat. 121-131 (May 19, 1924).
- "Both Coasts Threatened," The New York Times, September 3, 1935.
- "Veteran's Camp Wrecked by Storm," The New York Times, September 4, 1935.
- "Veterans Lead Fatalities,” The New York Times, September 5, 1935.
- "Link Bonus Issue to Florida Deaths," The New York Times, September 15, 1935.
- Nancy Baker, "Abel Meeropol (a.k.a. Lewis Allan): Political Commentator and Social Conscience," American Music 20, no. 1 (Spring 2002): 45.
- Hemingway, "Who Murdered the Vets?," The New Masses, September 17, 1935.
- Adjusted Compensation Payment Act, ch. 32, 49 Stat. 1099-1102 (Jan. 27, 1936).
- "Bonus Bill Becomes Law," The New York Times, January 28, 1936.
- For a detailed analysis of the Soldier’s Bonus expansionary effect, consult: Telser, "The Veterans' Bonus of 1936,"Journal of Post Keynesian Economics26, no. 2 (Winter 2003-4).
- Eggertsson and Pugsley, "The Mistake of 1937," 174.
- Roosevelt, "Annual Message to Congress, January 6, 1937,” The American Presidency Project.
- Roosevelt, "Annual Budget Message to Congress," The American Presidency Project.
- "Press Conference #357," April 2, 1937, Page 239, Press Conferences of President Franklin D. Roosevelt, 1933-1945, Franklin D. Roosevelt Presidential Library & Museum.
- Data source: Board of Governors of the Federal Reserve System (US), Industrial Production Index[INDPRO], retrieved from FRED, Federal Reserve Bank of St. Louis.
- "The Stock Market," The New York Times, October 20, 1937.
- Howard Wood, "Stocks Crash to New Lows,” Chicago Daily Tribune, October 19, 1937.
- "The Stock Market," The New York Times, October 20, 1937.
- Personal Memo, October 19, 1937, Volume 92: October 12-October 19, 1937; Page 229, The Diaries of Henry Morgenthau, Jr., Franklin D. Roosevelt Presidential Library & Museum, Hyde Park, NY.
- Transcript of Call between Morgenthau and FDR. October 19, 1937, Volume 92: October 12-October 19, 1937; Page 230, The Diaries of Henry Morgenthau, Jr., Franklin D. Roosevelt Presidential Library & Museum, Hyde Park, NY.
- Transcript of Call between Morgenthau and Burgess, October 19, 1937, Volume 92: October 12-October 19, 1937; Page 222, The Diaries of Henry Morgenthau, Jr., Franklin D. Roosevelt Presidential Library & Museum, Hyde Park, NY.
- Transcript of Phone Call between Morgenthau and FDR, October 20, 1937, Volume 93: October 20-October 31, 1937; Page 21, The Diaries of Henry Morgenthau, Jr., Franklin D. Roosevelt Presidential Library & Museum, Hyde Park, NY.
- Draft Letter to FDR, November 3, 1937, Volume 94: November 1-November 10, 1937; Page 47, The Diaries of Henry Morgenthau, Jr., Franklin D. Roosevelt Presidential Library & Museum, Hyde Park, NY.
- Roosevelt, "60 - Message to Congress," The American Presidency Project.
- Press Conference #401-1.
- Press Conference #405-5.
- Roosevelt, "Statement Summarizing the 1938," The American Presidency Project.
- Press Conferences #409-7; #415-8; #416-4.
- Press Conference #425-15.
- "A Cloud That's Dragonish,"The Times-Picayune(New Orleans, LA), January 8, 1937, 12.
- "Industry Pushes up after Holiday Lull; Steel Leads,"The Times-Picayune(New Orleans, LA), January 11, 1937, 18.
- Rodney Dutcher, "Behind the Scenes in Washington,"The Brownsville Herald(Brownsville, TX), April 2, 1937,4.
- This small, local, newspaper featured during the same week at least two in-depth articles focused on analysis of policy, not only news: "Public Funds Will Control High Prices?,"The Brownsville Herald(Brownsville, TX), April 4, 1937,1-2. "Prices,"The Brownsville Herald(Brownsville, TX), April 2, 1937,1.
- Conference to Talk Over Plans, 9/13/37, Volume 95: November 10, 1937; Page 1, Diaries of Henry Morgenthau, Jr., Franklin D. Roosevelt Presidential Library & Museum, Hyde Park, NY.
- Three Parts of Speech as Decided Upon, 10/28/37, Volume 95: November 10, 1937; Page 261, Diaries of Henry Morgenthau, Jr., Franklin D. Roosevelt Presidential Library & Museum, Hyde Park, NY.
- Shlaes,The Forgotten Man: A New History, 341-342.
- Complete Set of Speech Drafts, Volume 97: November 10, 1937; Page 149, Diaries of Henry Morgenthau, Jr., Franklin D. Roosevelt Presidential Library & Museum, Hyde Park, NY.
- Ibid., 142.
- Ibid., 143.
- Roosevelt, "Message to Congress Recommending," The American Presidency Project.
- "Document 50: February 28, 1938, Letter with attachments, To: Keynes From: Roosevelt," in FDR's Response to Recession, ed. George McJimsey, vol. 26, Documentary History of the Franklin D. Roosevelt Presidency (University Publications of America, 2005), 307.
- Ibid., 312.
- Roose, "The Recession of 1937-38," 239.
- Roose, "The Role of Net Government," 1.
- Personal Income is income received by individuals, non-profit institutions, private trust funds, and private pension funds. It is the sum of wages, labor income, rental income, interest, dividends, and transfer payments. Source: National Income and Product Statistics of the United States 1929-46, US Dept. of Commerce, 1946, p. 53-54. Net Gvt. Contribution to Income is a breakdown of measured net decreasing (taxes, etc.) and increasing expenditures (social services, etc.). Figures include local, state, and federal contributions. Source: Deficit Spending and the National Income, Henry H. Villard, 1941, Appendix I p. 323.
- Roose, "The Role of Net Government," 4.
- Ibid., 240.
- Ibid., 6.
- Ibid., 14.
- Roose, The Economics of Recession, 6.
- "Radio Address." Under the auspices of the National Radio Forum, conducted by The Washington Evening Star, broadcast over the National Broadcasting Company Network, January 23, 1939, https://fraser.stlouisfed.org/title/?id=446#!7658, accessed on February 1, 2015.
- Friedman and Schwartz, A Monetary History of the United, 493.
- Ibid., 495.
- Cole and Ohanian, "New Deal Policies and the Persistence," 783.
- Ibid., 784.
- An Act to Diminish the Causes of Labor Disputes Burdening or Obstructing Interstate and Foreign Commerce, to Create a National Labor Relations Board, and for Other Purposes., Pub. L. No. 74-198, Stat. (July 5, 1935).
- Jones & Laughlin Steel Corp. v. NLRB, 301 U.S. (1937).
- Cole and Ohanian, "New Deal Policies and the Persistence," 788.
- Velde, "The Recession of 1937—A," 30.
- Testimony Before the US Senate Committee on Banking, Housing, and Urban Affairs (2009) (statement of Lee E. Ohanian).
- Velde, "The Recession of 1937—A," 31.
- Romer, "What Ended the Great Depression?," 763.
- Overwhelmingly, the NLRA has been discounted as a contributing factor to the Recession. For a detailed review of the existing literature, specifically that related to the NLRA, consult: Papadimitriou and Hannsgen,Lessons from the New Deal: Did the New Deal Prolong or Worsen the Great Depression?
- Gauti B. Eggertsson and Benjamin Pugsley, "The Mistake of 1937: A General Equilibrium Analysis," Monetary and Economic Studies 24, nos. S-1 (December 2006): 153.
- Ibid., 151.
- Ibid., 154.
- Gauti B. Eggertsson, Great Expectations and the End of the Depression, staff report no. 234 (Federal Reserve Bank of New York, 2005). Published as "Great Expectations and the End of the Depression," American Economic Review 98, no. 4 (September 2008).
- Eggertsson and Pugsley, "The Mistake of 1937," 174.
- Franklin D. Roosevelt, "Annual Message to Congress," address, January 6, 1937, The American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=15336.
- Eggertsson and Pugsley, "The Mistake of 1937," 175, Table 3.
- Ibid., 182.
- Ibid., 180.
- "Press Conference #434," February 15, 1938, Press Conferences of President Franklin D. Roosevelt, 1933-1945, Franklin D. Roosevelt Presidential Library & Museum.
- Friedman and Schwartz, A Monetary History of the United, 496.
- Arthur F. Burns and Wesley C. Mitchell, Measuring Business Cycles, Studies in Business Cycles 2 (New York: National Bureau of Economic Research, 1946),88-89
- Roose, "The Role of Net Government," 10.
- Friedman and Schwartz, A Monetary History of the United, 517.
- Ibid., 515.
- Ibid., 518.
- Each concern listed on the memorandum is closely analyzed in A Monetary History, 523.
- Ibid., 520.
- Romer, "What Ended the Great," 758.
- Ibid.
- Ibid., 759.
- Ibid., 758.
- Romer, "Lessons from the Great Depression for Economic Recovery in 2009," speech presented at Brookings Institution, Washington D.C., March 9, 2009, 3.
- Brown, "Fiscal Policy in the 'Thirties," 863-866.
- Romer, "Lessons from the Great,” speech, 3.
- Ibid., 4.
- Velde, "The Recession of 1937—A," 34.
- Ibid., 25.
- Ibid., 26.
- Ibid.
- Cargill and Mayer, "The Effect of Changes," 417-418.
- Ibid., 430.
- Ibid., 430-431.
- January 1935 was chosen as the starting point because the economy was, by that time, in steady recovery. This allows for an analysis untarnished by the shocks that occurred early during the Depression. December 1938 was chosen as the end point in order to exclude from the analysis any possible impacts of pre-WWII German aggression, especially that caused by the Occupation of Czechoslovakia in March 1939.
- Board of Governors of the Federal Reserve System (US), Industrial Production Index [INDPRO], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/INDPRO/
- NBER, The End of the Great Depression 1939-41: Policy Contributions and Fiscal Multipliers, by Robert J. Gordon and Robert Krenn, working paper no. 16380, 2010. Robert J. Gordon and Robert Krenn, "New Gordon-Krenn quarterly and monthly data set for 1913-54" (unpublished raw data), accessed March 30, 2015, http://faculty-web.at.northwestern.edu/economics/Gordon/researchhome.html.
- NBER, The End of the Great, 43. Gordon and Krenn provide more detailed information about the process, including the monthly independent interpolators used, in their appendix. (NBER, The End of the Great, 42-54).
- Gordon and Krenn explain the transformation of government spending: “A problem arises in this series because it includes not just G but also transfer payments, which are excluded when calculating GDP. The monthly interpolator series is distorted by particularly large transfer payments in scattered quarters. To find these quarters, we calculated the monthly log change in the interpolator, after changing the data to real terms and X11 s.a. Whenever a monthly change of +40 percent or more was followed by a monthly change of approximately the same amount with a negative sign, we replaced that “bulge” observation by the average of the preceding and succeeding months. These bulges occurred and were corrected for in 4 months: 1931:12, 1934:01, 1936:06, and 1937:06.” (NBER, The End of the Great, 46.)
- The wage and manhour datasets were individually re-indexed to January 1935 prior to their transformation.
- The assumption that monetary policy may have played a role in the recession hinges on the assumption that the money supply was impacted by the increased reserve requirements. Based on the related discussion presented in the previous chapter, both assumptions are made.
- NBER macrohistory datasets utilized: Total sum of excess and required reserves held, (series 14064); Percentage of total reserves held to reserves required (series 14086).
- Velde, "The Recession of 1937—A,"24.
- Velde’s Figure 8.C highlights the remarkably stark accumulation of excess reserves by central reserve city banks. (Velde, "The Recession of 1937—A,"24.)
- The monthly GDP deflator was obtained from the Gordon and Krenn dataset. See footnote 178.
- Real money supply excluding reserves was created by subtracting deflated total reserves (series 14064) from deflated money stock (series 14144a).
- A strong case has been made for the use of bank assets, not liabilities, as the measurement of bank holdings during the 1937 period. However, to examine closely the argument as made by Friedman, and due to the lack of reliable monthly asset-side data, the more traditional liability-side measurement is used. For a detailed study of the alternative asset-side measurement, one that highlights the shortcomings of liability-side measurements, consult: Telser, "Higher Member Bank Reserve Ratios in 1936 and 1937 Did Not Cause the Relapse into Depression,"Journal of Post Keynesian Economics.
- Model 4 was cleaned by removing, step by step, the most insignificant variable lags found in Model 2.Insignificant variables were removeduntil regression was narrowed to only significant regressors.
- G% of GDP during years examined averaged 15%.
- NBER, The End of the Great, 35.
- Keynes, "Chapter 24: Concluding Notes," in The General Theory of Employment.
Appendix
Tables
Table A-1
Table A-2
Table A-3
Table A-4. Simple regression of each independent variable on GDP or industrial production.
Table A-5. Breusch-Godfrey Test Results for Table A-4 regressions.
Figures
Figure A-1. Autocorrelation plot of GDP variable.
Figure A-2. Partial autocorrelation plot of GDP variable.
Figure A-3. Scatterplot of the GDP variable against its first lag.
Figure A-4. Scatterplot of the GDP variable against its second lag.
Figure A-5 Autocorrelations of Industrial Production
Figure A-6 Partial Autocorrelations of Industrial Production
Figure A-7 Scatterplot of Model 1 Residuals Against Fitted Values
Figure A-8 Histogram of Model 1 Residuals
Figure A-9 Model 1 Residuals Plotted Over Time
Figure A-10 Autocorrelations of Model 1 Residuals
Figure A-11 Partial Autocorrelations of Model 1 Residuals
Figure A- 12. Histogram of Model 4 Residuals.
Figure A- 13. Autocorrelations of Model 4 Residuals.
Figure A- 14. Partial Autocorrelations of Model 4 Residuals.
Figure A- 15. Lineplot of Model 4 Residuals.
Save Citation » (Works with EndNote, ProCite, & Reference Manager)
APA 6th
Rafti, J. (2015). "Roosevelt's Recession: A Historical and Econometric Examination of the Roots of the 1937 Recession." Inquiries Journal/Student Pulse, 7(06). Retrieved from http://www.inquiriesjournal.com/a?id=1053
MLA
Rafti, Jonian. "Roosevelt's Recession: A Historical and Econometric Examination of the Roots of the 1937 Recession." Inquiries Journal/Student Pulse 7.06 (2015). <http://www.inquiriesjournal.com/a?id=1053>
Chicago 16th
Rafti, Jonian. 2015. Roosevelt's Recession: A Historical and Econometric Examination of the Roots of the 1937 Recession. Inquiries Journal/Student Pulse 7 (06), http://www.inquiriesjournal.com/a?id=1053
Harvard
RAFTI, J. 2015. Roosevelt's Recession: A Historical and Econometric Examination of the Roots of the 1937 Recession. Inquiries Journal/Student Pulse [Online], 7. Available: http://www.inquiriesjournal.com/a?id=1053
Suggested Reading from Inquiries Journal
After years of economic downturn and recovery, the debate over stimulus packages and countercyclical policy continues globally. Proponents of such policies claim that the various stimulus packages and policy initiatives around the globe helped bring about quicker recovery, while opponents claim that in many cases these policies... MORE»
The Obama presidency will largely be defined by the administration’s ability to respond to the unique and historic challenge facing the country at the time of his inauguration: the Great Recession. This paper evaluates the president’s success throughout both of his terms in enacting an economic policy, which was largely... MORE»
The “Great Recession” of 2008 resulted in unprecedented levels of state deficit spending.[1] However, even though deficits are partly the result of economic forces beyond the control of state governments&mdash... MORE»
An exhibition entitled “The Quilts of Gee’s Bend” opened at the Whitney Museum of American Art in New York in November, 2002 (McGee), bringing worldwide attention to a secluded hamlet in a curve of the Alabama River. Unbeknownst to many of the admirers of these brightly patterned blankets was that the national spotlight had once before been shone on the town. That time... MORE»
Latest in Economics
2020, Vol. 12 No. 09
Recent work with the Economic Complexity Index (ECI) has shown that a country’s productive structure constrains its level of economic growth and income inequality. Building on previous research that identified an increasing gap between Latin... Read Article »
2018, Vol. 10 No. 10
The value proposition in the commercial setting is the functional relationship of quality and price. It is held to be a utility maximizing function of the relationship between buyer and seller. Its proponents assert that translation of the value... Read Article »
2018, Vol. 10 No. 03
Devastated by an economic collapse at the end of the 20th century, Japan’s economy entered a decade long period of stagnation. Now, Japan has found stable leadership, but attempts at new economic growth have fallen through. A combination of... Read Article »
2014, Vol. 6 No. 10
In July 2012, Spain's unemployment rate was above 20%, its stock market was at its lowest point in a decade, and the government was borrowing at a rate of 7.6%. With domestic demand depleted and no sign of recovery in sight, President Mariano Rajoy... Read Article »
2017, Vol. 9 No. 10
During the periods of the Agrarian Revolt and the 1920s, farmers were unhappy with the economic conditions in which they found themselves. Both periods witnessed the ascent of political movements that endeavored to aid farmers in their economic... Read Article »
2017, Vol. 7 No. 2
In 2009, Brazil was in the path to become a superpower. Immune to the economic crises of 2008, the country's economy benefitted from the commodity boom, achieving a growth rate of 7.5 per cent in 2010, when Rousseff was elected. A few years later... Read Article »
2012, Vol. 2 No. 1
The research completed aimed to show that the idea of fair trade, using the example of goals for the chocolate industry of the Ivory Coast, can be described as an example of the economic ideal which Karl Marx imagined. By comparing specific topics... Read Article »
|
