TY  - JOUR
AU  - Betts,Caroline M.
AU  - Bordo,Michael D.
AU  - Redish,Angela
TI  - A Small Open Economy in Depression: Lessons from Canada in the 1930s
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4515
PY  - 1996
Y2  - December 1996
UR  - http://www.nber.org/papers/w4515
L1  - http://www.nber.org/papers/w4515.pdf
N1  - Author contact info:
Michael D. Bordo
Department of Economics
Rutgers University
New Jersey Hall
75 Hamilton Street
New Brunswick, NJ 08901
Tel: 732/822-7152
Fax: 732/932-7416
E-Mail: bordo@econ.rutgers.edu

Angela Redish
Department of Economics
University of British Columbia
#997 1873 East Mall
Vancouver BC V6T 1Z1 CANADA
E-Mail: anji@econ.ubc.ca
AB  - This paper tests the hypothesis that idiosyncratic U.S. disturbances and their international propagation can account for the global Depression.  Exploiting common stochastic trends in U.S. and Canadian interwar data, we estimate a small open economy model for Canada that decomposes output fluctuations into sources identifiable with world and country-specific disturbances.  We find that the onset, depth and duration of output collapse in both Canada and the U.S. are primarily attributable to a common, permanent output shock leaving little significant role for idiosyncratic disturbances originating in either economy.
ER  -