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Sonderforschungsbereich 373: Quantification and Simulation of Economic Processes, Humboldt-Universität Berlin >
Discussion Papers, SFB 373, HU Berlin >
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http://hdl.handle.net/10419/65334
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| Title: | | Did sunspot cause the Great Depression?  |
| Authors: | | Harrison, Sharon G. Weder, Mark |
| Issue Date: | | 2002 |
| Series/Report no.: | | Discussion Papers, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes 2002,35 |
| Abstract: | | We apply a dynamic general equilibrium model to the period of the Great Depression. In particular, we examine a modification of the real business cycle model in which the possibility of indeterminacy of equilibria arises. In other words, agents' self-fulfilling expectations can serve as a primary impulse behind fluctuations. We find that the model, driven only by these measured sunspot shocks, can explain well the entire Depression era. That is, the decline from 1929-1932, the subsequent slow recovery, and the recession that occurred in 1937-1938. |
| Subjects: | | Great Depression Sunspots Dynamic General Equilibrium |
| JEL: | | E32 N12 |
| Persistent Identifier of the first edition: | | urn:nbn:de:kobv:11-10048937 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Discussion Papers, SFB 373, HU Berlin
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