Measuring the Onset of the Great Depression : Then and Now

U.S. industrial production data published in 1929-30 show a steep drop in production from June to December 1929 and a substantial recovery by February 1930. Revised data used in recent analyses of the Great Depression show a smaller decline in 1929 and no recovery period. This paper identifies differences in seasonal patterns as an important source of the disparity in the time paths of production. A comparison of modern seasonal adjustment procedures applied to data available in 1929-30 with methods applied in 1929-30 shows that the historical methods provided misleading real time information to economic agents and decision makers