From March to July 1933, industrial production rose 57 percent. We show that an important source of recovery was the effect of dollar devaluation on farm prices, incomes, and consumption. Devaluation immediately raised traded crop prices, and auto sales grew more rapidly in states and counties...

We argue that falling farm product prices, incomes, and spending may explain 10-30 percent of the 1930 U.S. output decline. Crop prices collapsed, reducing farmers' incomes. And across U.S. states and Ohio counties, auto sales fell most in crop-growing areas. The large spending response may be...