The Differential Timing of the Great Depression

The Economic History Association meetings currently underway in Washington D.C. have a number of fascinating sessions including several on economic depression and financial crises.  One paper by Thilo Albers (Humboldt University Berlin) and Martin Uebele (University of Groningen) is particularly interesting given that it presents a new monthly international dataset for the interwar period (1925-1936) that sheds some interesting light on how the Great Depression spread.

 Albers and Uebele present monthly data on a cross-section of 28 countries taken from German statistics compiled during this period – the Statistiche Reichsamt. The Statistiche Reichsamt gathered data from national statistical agencies around the world as well as private banks and business publications.  The variables include unemployment rates as well mining and transport indices and price indices.  They date business cycle peaks and troughs during the Great Depression and find that while pre-Depression peaks occurred in almost all countries in 1929, some countries were severely hit by the crisis as late as 1930 and 1931.  The spread of the Great Depression was not an instantaneous catastrophic event but occurred over several years.

More specifically: “First, the pre-Depression peak occurred in almost all countries in 1929. Second, the Great Depression hit some agricultural economies more severely as late as 1930 and 1931. Finally, some countries showed a short period of stabilisation in 1930 before continuing their economic free fall.” As well, in most countries the economy was already in a downturn when the New York stock market crash occurred.  What is interesting from the presentation they provided is that based on their analysis of their monthly economic activity indicators, the downturn was underway first in Canada, Australia, Chile and New Zealand.  As was remarked on during the discussion that followed the paper – the less economically diversified resource-producing periphery provided the first indicators the world economy was slowing during this time period as the demand for their inputs into more diversified economies slowed.  There is of course much more to this paper than these few words can convey.  Some very interesting stuff.

 

Comments

[sustain_ability]

Key quote:

"..the less economically diversified resource-producing periphery provided the first indicators the world economy was slowing during this time period as the demand for their inputs into more diversified economies slowed.."

[Determinant]

Which is why Newfoundland hit so hard. In 1929 they were in trouble; in 1933 the Commission of Government was instituted under threat of debt default.

[The Keystone Garter]

I'm learning why Valour Rd produced 3 Victoria's Cross recipients and why Intrepid was from Wpg.
Wpg was a booming city turn of the century, due to the railroad. Very similiar to Vancouver during the Great Depression and their Stimulus-programme spending Premier. Both produced off the charts Victoria Cross numbers. Both had Scottish Enlightenment immigrant roots as well as receiving nearby unemployed population immigrants. The latter is key. People felt the bad times and knew how good the good times were. Sociology explains this. Immigrants from dead towns and cities told others how good the gravy train was. People felt proud. Wpg had a strong sense of community too. My understand here is a little weak. People basically outdid eachother trying to prove how respected their cities should be. Athens produced something very similiar during the dawn of rationality, but it was too Blue blooded, to prejudiced against outsiders. The Scots produced this in their respect for education, basically GERD education (military apps excepted from R+D) compared to warring Europe. Scotland drew Europe's best and brightest. Athens drew the brightest of the known world (to witness theatre). Wpg drew unemployed and already well educated people. Vancouver was one of the only Stimulus spending regimes during the Great Depression. The Valour Rd trio were all friends of friends of friends, unknowingly willing to die bravely because they knew they represented a superior system. Orange County is similiar in that the electronics induastry itself is inheritently creative.
This can be used, but I'm not sure whether you try to engender, shock-researchers, shock-leaders, shock educators...it would be nice to have good Census Stats from these eras.

[The Keystone Garter]

Another pt: in all 4 cases the initial stimulus for efficiencies was planned public or private. The King of England built four Scottish cities. Athens arts and logic schools were funded by booty. Later the Roman Empire degenerated when the booty instead funded Rome lobbying by dumb officials: Soviet cronyism. Wpg was planned as maybe the biggest rail hub on Earth, probably as part of the use it or lose it scheme of settling the West. Later, Vancouver benefited from port expansion with the Panama Canal opening, and by Keynesian Premier. Even with Orange County, the electronics industry pre-WWII was bolstered into a computer power by WWII USA demand for calculators able to figure munitions trajectories.
In the future, the funding for 22nd industries will likely come from a wise 21st century player.