Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/65334
Authors: 
Harrison, Sharon G.
Weder, Mark
Year of Publication: 
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: 
Document Type: 
Working Paper

Files in This Item:
File
Size
772.12 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.