The recent global recession requires policy makers to identify the relative importance of shock transmission mechanisms in each region and devise counter policy measures against future idiosyncratic shocks. In the last decade, world dynamics have changed considerably due to increased openness...

Drawing on recent business cycle research on the Great Depression, we return to an argument we advanced in a 1996 article in the Journal of Monetary Economics - the argument that features of the Hawley-Smoot tariffs could have done more to decrease economic activity than is customarily believed,...

Price inflation in the euro area has been stable and low since the Global Financial Crisis, despite notable changes in output and unemployment. We show that an increasing share of high markup firms is part of the explanation of why inflation remained stubbornly stable and low in the euro area...

The 1920s often called the “Golden 20s” because the equity markets were booming but there were a series of structural issues. Only a few years after the 1st World War the global economy was still suffering from the consequences of the brutal war. The market crash of 1929 came unexpected and...

The possibility of crisis in the years ahead, as in the years that followed the first half of 1930, lies in private revulsion against the dollar − e.g. by Japanese insurance companies with their vast savings and limited investment opportunities at home, unmatched by public governmental efforts...

The U.S. today experiences an expanding financial economy. Investors benefit as common stock prices rise. Moreover, the finance industry grows relative to other industries (called “financialization”). But at the same time, the real economy lags. Workers' pay and job opportunities stagnate as...

This paper traces the evolution of the concept of the cyclically adjusted budget from the 1930s to the present. The idea of balancing the budget over the cycle was first conceived in Sweden in the 1930s by the economists of the Stockholm School and was soon reinterpreted and incorporated into...

We identify similarities and differences in the scale and nature of the banking crises in 2008-2009 and the Great Depression, and analyse differences in the policy response to the two crises in light of the prevailing international monetary systems. We find that the scale of the banking crisis,...

The strategic outlook of the U.S. can be assessed by analyzing the balance sheets of its main sectors, which are mutually linked by a coherent system of accounting. The expansion of the period 1992-2000 was greeted by a wave of complacency in the United States and it was thought that it could...

Modern growth theory derives mostly from Robert Solow's “A Contribution to the Theory of Economic Growth” (1956). Solow's own interpretation locates the origins of his “Contribution” in his view that the growth model of Roy Harrod implied a tendency toward progressive collapse of the...