TY  - JOUR
AU  - Cecchetti,Stephen G.
AU  - Karras,Georgios
TI  - Sources of Output Fluctuations During the Interwar Period:  Further Evidence on the Causes of the Great Depression
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4049
PY  - 1992
Y2  - April 1992
UR  - http://www.nber.org/papers/w4049
L1  - http://www.nber.org/papers/w4049.pdf
N1  - Author contact info:
Stephen G. Cecchetti
Monetary and Economic Department
Bank for International Settlements
Centralbahnplatz 2
4002 Basel
SWITZERLAND
Tel: +41 61 280 8350
Fax: +41 61 280 9113
E-Mail: stephen.cecchetti@bis.org
AB  - This paper decomposes output fluctuations during the 1913 to 1940 period into components resulting from aggregate supply and aggregate demand shocks. We estimates a number of different models, all of which yield qualitatively similar results. While identification is normally achieved by assuming that aggregate demand shocks have no long run real effects, we also estimate models that allow demand shocks to permanently affect output. Our findings support the following three conclusions: (i) there was a large negative aggregate demand shock in November 1929, immediately after the stock market crash; (ii) aggregate demand shocks are mainly responsible for the decline in output through mid to late 1931; (iii) beginning in mid 1931 there is an aggregate supply collapse that coincides with the onset on severe bank panics.
ER  -