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Accounting for the French Great Depression

Author

Listed:
  • Slim BRIDJI

    (University of Paris X and EconomiX)

Abstract
To understand the driving forces of the French Great Depression, we use the business cycle accounting methodology (Chari et al. (2006)) which decomposes macroeconomic fluctuations into several wedges linked to specific markets and economic behaviors. The wedges associated with the efficiency in the final good production and the investment behavior are the major contributors to the downturn, but with opposite effects. The strongly depressive efficiency wedge would have lead to a deeper depression without the expansive investment wedge. This conclusion contrasts with previous analyses focusing on labor market changes to explain great depressions in France and the United States.

Suggested Citation

  • Slim BRIDJI, 2007. "Accounting for the French Great Depression," 2007 Meeting Papers 461, Society for Economic Dynamics.
    • Handle: RePEc:red:sed007:461
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    References listed on IDEAS

    as
    1. Paul Beaudry & Franck Portier, 2002. "The French Depression in the 1930s," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(1), pages 73-99, January.
    2. Lawrence J. Christiano & Joshua M. Davis, 2006. "Two flaws in business cycle accounting," Working Paper Series WP-06-10, Federal Reserve Bank of Chicago.
    3. Bernanke, Ben S, 1983. "Nonmonetary Effects of the Financial Crisis in Propagation of the Great Depression," American Economic Review, American Economic Association, vol. 73(3), pages 257-276, June.
    4. V. V. Chari & Patrick J. Kehoe & Ellen R. McGrattan, 2003. "Accounting for the Great Depression," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 27(Spr), pages 2-8.
    5. Bernanke, Ben S, 1995. "The Macroeconomics of the Great Depression: A Comparative Approach," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 27(1), pages 1-28, February.
    6. Lawrence J. Christiano & Joshua M. Davis, 2006. "Two flaws in business cycle dating," Working Papers (Old Series) 0612, Federal Reserve Bank of Cleveland.
    7. V. V. Chari & Patrick J. Kehoe & Ellen R. McGrattan, 2007. "Business Cycle Accounting," Econometrica, Econometric Society, vol. 75(3), pages 781-836, May.
    8. Lawrence J. Christiano & Roberto Motto & Massimo Rostagno, 2003. "The Great Depression and the Friedman-Schwartz hypothesis," Proceedings, Federal Reserve Bank of Cleveland, pages 1119-1215.
    9. V. V. Chari & Patrick J. Kehoe & Ellen R. McGrattan, 2002. "Accounting for the Great Depression (technical appendix)," Working Papers 619, Federal Reserve Bank of Minneapolis.
    10. V. V. Chari & Patrick J. Kehoe & Ellen R. McGrattan, 2006. "Comparing alternative representations and alternative methodologies in business cycle accounting," Working Papers 647, Federal Reserve Bank of Minneapolis.
    11. Casey B. Mulligan, 2002. "A Dual Method of Empirically Evaluating Dynamic Competitive Equilibrium Models with Market Distortions, Applied to the Great Depression & World War II," NBER Working Papers 8775, National Bureau of Economic Research, Inc.
    12. Harold L. Cole & Lee E. Ohanian, 1999. "The Great Depression in the United States from a neoclassical perspective," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 23(Win), pages 2-24.
    13. Harold L. Cole & Lee E. Ohanian, 2004. "New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 779-816, August.
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    Cited by:

    1. Masaru Inaba & Kengo Nutahara, 2012. "An application of business cycle accounting with misspecified wedges," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(2), pages 265-269, April.
    2. Masaru Inaba & Kengo Nutahara, 2012. "An application of business cycle accounting with misspecified wedges," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(2), pages 265-269, April.

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