Harvests and Business Cycles in Nineteenth-Century America
Most major American industrial business cycles from around 1880 to the First World War were caused by fluctuations in the size of the cotton harvest due to economically exogenous factors such as weather. Wheat and corn harvests did not affect industrial production; nor did the cotton harvest before the late 1870s. The unique effect of the cotton harvest in this period can be explained as an essentially monetary phenomenon, the result of interactions between harvests, international gold flows and high-powered money demand under America's gold-standard regime of 1879-1914.
We have benefited from the suggestions and comments of participants at presentations at the NBER-DAE, Society for Economic Dynamics, All-UC Group in Economic History, and UC Davis. Thanks to Charles Calomiris, John James, Jon Moen, Scott Redenius, Kenneth Snowden, Alan Taylor, Marc Weidenmier and David Weiman for comments, suggestions and data. Rhode is supported by NSF grant 34-3428-00-0-79-405. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.
Joseph H. Davis & Christopher Hanes & Paul W. Rhode, 2009. "Harvests and Business Cycles in Nineteenth-Century America," The Quarterly Journal of Economics, MIT Press, vol. 124(4), pages 1675-1727, November. citation courtesy of