TY  - JOUR
AU  - Conesa,Juan Carlos
AU  - Kehoe,Timothy J.
AU  - Ruhl,Kim J.
TI  - Modeling Great Depressions: The Depression in Finland in the 1990s
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13591
PY  - 2007
Y2  - November 2007
UR  - http://www.nber.org/papers/w13591
L1  - http://www.nber.org/papers/w13591.pdf
N1  - Author contact info:
Juan Carlos Conesa
Universitat Autonoma de Barcelona
Department of Economics
Edifici B, Campus Bellaterra
08193 Cerdanyola del Valles, SPAIN
Tel: 34 935813210
Fax: 34 935812012
E-Mail: juancarlos.conesa@uab.es

Timothy J. Kehoe
University of Minnesota
Department of Economics
1925 Fourth Street South
Minneapolis, MN 55455-0462
Tel: 612/625-1589
Fax: 612/204-5515
E-Mail: tkehoe@umn.edu

Kim J. Ruhl
NYU Stern School of Business
Department of Economics
44 West Fourth Street, Suite 7-86
New York, NY 10012-1126
E-Mail: kruhl@stern.nyu.edu
AB  - This paper is a primer on the great depressions methodology developed by Cole and Ohanian (1999, 2007) and Kehoe and Prescott (2002, 2007).   We use growth accounting and simple dynamic general equilibrium models to study the depression that occurred in Finland in the early 1990s.  We find that the sharp drop in real GDP over the period 1990-93 was driven by a combination of a drop in total factor productivity (TFP) during 1990-92 and of increases in taxes on labor and consumption and increases in government consumption during 1989-94, which drove down hours worked in Finland.  We attempt to endogenize the drop in TFP in variants of the model with an investment sector and with terms-of-trade shocks but are unsuccessful.
ER  -