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Efficiency, distortions and factor utilization during the interwar period
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Klein , Alexander and Otsuy, Keisuke (2013) Efficiency, distortions and factor utilization during the interwar period. Working Paper. Coventry, UK: Department of Economics, University of Warwick. CAGE Online Working Paper Series, Volume 2013 (Number 147).
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Official URL: http://www2.warwick.ac.uk/fac/soc/economics/resear...
Abstract
In this paper, we analyze the International Great Depression in the US and Western Europe using the business cycle accounting method a
la Chari, Kehoe and McGrattan (CKM 2007). We extend the business cycle accounting model by incorporating endogenous factor utilization which turns out to be an important transmission mechanism of the
disturbances in the economy. Our main Öndings are that in the U.S. labor wedges account for roughly half of the drop in output while efficiency and investment wedges each account for a quarter of it during
the 1929-1933 period while in Western Europe labor wedges account for more than one-third of the output drop and e¢ ciency, government and investment wedges are responsible for the remaining during the
1929-1932 period. Our Öndings are consistent with several strands of existing descriptive and empirical literature on the International Great Depression
| Item Type: | Working or Discussion Paper (Working Paper) |
|---|---|
| Alternative Title: | |
| Subjects: | H Social Sciences > HB Economic Theory H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HN Social history and conditions. Social problems. Social reform |
| Divisions: | Faculty of Social Sciences > Economics |
| Library of Congress Subject Headings (LCSH): | Depressions -- 1929 -- Europe , Depressions -- 1929 -- United States, Stock Market Crash, 1929, Business cycles , Business cycles -- Mathematical models |
| Series Name: | CAGE Online Working Paper Series |
| Publisher: | Department of Economics, University of Warwick |
| Place of Publication: | Coventry, UK |
| Official Date: | August 2013 |
| Volume: | Volume 2013 |
| Number: | Number 147 |
| Number of Pages: | 60 |
| Status: | Not Peer Reviewed |
| Publication Status: | Published |
| URI: | http://wrap.warwick.ac.uk/id/eprint/59239 |
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