scholarly journals Recovery from the Great Depression: The Farm Channel in Spring 1933

2019 ◽  
Vol 109 (2) ◽  
pp. 427-472 ◽  
Author(s):  
Joshua K. Hausman ◽  
Paul W. Rhode ◽  
Johannes F. Wieland
Keyword(s):  
Substantial Portion ◽  
Macroeconomic Policies ◽  
Large Aggregate ◽  
Regime Changes ◽  
The Great Depression ◽  
Price Increases ◽  
Monetary Regime ◽  
Aggregate Effects ◽  
Farm Debt ◽  
On Farm

From March to July 1933, US 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 most exposed to these price increases. The response was amplified in counties with more severe farm debt burdens. For plausible assumptions about farmers’ relative MPC, the incidence of higher farm prices, and the aggregate multiplier, this redistribution to farmers accounted for a substantial portion of spring 1933 growth. This farm channel thus provides an example of how the distributional consequences of macroeconomic policies can have large aggregate effects. That recovery in 1933 benefited from redistribution to farmers suggests an important limitation to the use of 1933 as a guide to the effects of monetary regime changes in other circumstances. (JEL E32, E65, N12, N52, Q11, Q12)

scholarly journals Weather Shocks and Output in Low-Income Countries

2019 ◽  
Vol 19 (178) ◽  
Author(s):  
Sebastian Acevedo Mejia ◽  
Claudio Baccianti ◽  
Mico Mrkaic ◽  
Natalija Novta ◽  
Evgenia Pugacheva ◽  
...  
Keyword(s):  
Global Warming ◽  
Low Income ◽  
Negative Relationship ◽  
Low Income Countries ◽  
Macroeconomic Policies ◽  
Large Aggregate ◽  
Weather Shocks ◽  
Dynamic General Equilibrium Model ◽  
Output Losses ◽  
Adaptive Policies

We explore the extent to which macroeconomic policies, structural policies, and institutions can mitigate the negative relationship between temperature shocks and output in countries with warm climates. Empirical evidence and simulations of a dynamic general equilibrium model reveal that good policies can help countries cope with negative weather shocks to some extent. However, none of the adaptive policies we consider can fully eliminate the large aggregate output losses that countries with hot climates experience due to rising temperatures. Only curbing greenhouse gas emissions—which would mitigate further global warming—could limit the adverse macroeconomic consequences of weather shocks in a long-lasting way.

Politics, Central Bank, Monetary Regime and Government Bankruptcy

2021 ◽  
pp. 277-297
Author(s):  
Peter Bernholz
Keyword(s):  
World War I ◽  
Money Supply ◽  
Price Level ◽  
Developed Countries ◽  
Necessary Condition ◽  
Paper Money ◽  
Institutional Settings ◽  
The Great Depression ◽  
Monetary Regime ◽  
Sustained Inflation

The damages and suffering caused by inflation during the course of history are enormous. Still, the worst excesses of inflation occurred not before the 20th century. This development was a consequence of the further technical development of money from coins to paper money and book money together with changes in the monetary regime or constitution ruling supply and control of money. Sustained inflation has always been a mone-tary phenomenon in the sense that the increase of the money supply is a necessary condition for its occurrence. Moreover, if an increase of the money supply is permanently outstripping the growth of real gross domestic product it is also a sufficient condi-tion for inflation. But that is not the whole story. For it has still to be asked which are the factors and institutional settings that allow the excessive growth of the money supply. And here historical evidence provides a clear answer (Figure 1). During the rule of the gold and silver standards until the outbreak of the World War I or after the restoration of it until the Great Depression of the 1930s no upward trend of the price level, but only long-term swings can be observed. But after the demise of the convertibility of banknotes into gold at a fixed parity and thus the introduction on a discretionary paper money standard the price level rises dramatically even in the respective developed countries.

scholarly journals Simulating the Impact of Input-Price Inflation on Farm Income

1971 ◽  
Vol 3 (1) ◽  
pp. 51-57
Author(s):  
Leroy Quance ◽  
Luther Tweeten
Keyword(s):  
Interest Rates ◽  
Labor Unions ◽  
Farm Income ◽  
Input Price ◽  
Price Inflation ◽  
Price Increases ◽  
Imperfectly Competitive ◽  
The Cost ◽  
On Farm ◽  
The Impact

A 1964 survey of 500 wheat producers in Oklahoma and Kansas revealed that the cost-price squeeze is most commonly viewed by farmers as the major cause of chronically low farm income.The cost side of the squeeze is widely attributed to the wage-price spiral caused by cycles of wage and input price increases negotiated between labor unions and imperfectly competitive firms, and to rising taxes and interest rates.

scholarly journals Money Doctors and Latin American Central Banks at the Onset of the Great Depression

2021 ◽  
pp. 1-35
Author(s):  
Juan Flores Zendejas
Keyword(s):  
Latin America ◽  
Private Sector ◽  
Great Depression ◽  
Latin American ◽  
Interwar Period ◽  
Central Banks ◽  
The Great Depression ◽  
Monetary Regime ◽  
Capital Outflows ◽  
New Institutions

Abstract Many of today's central banks in Latin America were established in the interwar period. During the 1920s, most of them were designed under the influence of money doctors. The main mandate of these new institutions was to cope with inflation and provide exchange stability. This article analyses how these central banks responded to the onset of the Great Depression. I show that, in accordance with the requirements of the monetary regime, central banks initially acted to prevent capital outflows and to protect their gold reserves. This led to a credit drop to the private sector. Additional credit was made available once governments decided to intervene more actively in the economy, thereby disregarding the advice of money doctors. The central banks that were founded in the 1930s, and the reforms introduced to those already operating, were conceived to face the effects of the crisis.

Decoupling direct payments: potential impacts of the 2014 farm bill on farm debt

2015 ◽  
Vol 75 (4) ◽  
pp. 434-449
Author(s):  
Anton Bekkerman ◽  
Eric Belasco ◽  
Amy Watson
Keyword(s):  
Farm Bill ◽  
Direct Payments ◽  
Farm Debt ◽  
On Farm

scholarly journals An Analysis of Optimal Farm Capital Structure

1977 ◽  
Vol 9 (1) ◽  
pp. 163-168 ◽  
Author(s):  
Wesley N. Musser ◽  
Fred C. White ◽  
John C. McKissick
Keyword(s):  
Capital Structure ◽  
Great Depression ◽  
Standard Of Living ◽  
Farm Size ◽  
Net Income ◽  
The Great Depression ◽  
Research Division ◽  
Farm Credit ◽  
Disastrous Experience ◽  
On Farm

Use of debt in financing agricultural firms is an issue of perennial interest. Much of this interest reflects farmers’ disastrous experience with debt during the Great Depression. The foreclosed mortgages and bankruptcies of that era reaffirmed an historical feeling that achieving a level of zero debt or financial leverage was a high priority goal. E. G. Johnson, who was Chief of the Economic and Credit Research Division of the Farm Credit Administration, articulated the position in the 1940 Yearbook of Agriculture that this goal is even more important than increasing profits: “It may be well to emphasize again that while credit properly used may help farmers to increase their income and raise their standard of living, the fact must not be overlooked that more credit will not cure all the ills of agriculture. The greatest need is to assist the farmers in getting out of debt, not deeper into it,” [6, p. 754]. As memories of the Great Depression faded, agricultural economists tended to emphasize the effect of debt on farm size and therefore net income.

Fall Down Seven Times Get Up Eight?

2019 ◽  
pp. 1-30
Author(s):  
Alan Bollard
Keyword(s):  
Great Depression ◽  
Military Spending ◽  
The Elderly ◽  
Macroeconomic Policies ◽  
The Great Depression ◽  
Japanese Military ◽  
Elderly Japanese ◽  
European Markets

The chapter opens in 1936 with rebel soldiers of the Japanese Army creeping through the snow to assassinate the elderly Japanese Minister of Finance, Takahashi Korekiyo. He was a remarkable self-taught Japanese, many times Minister of Finance, who learned his economic and financial skills raising funding in European markets to finance the Japanese-Russian War. He managed bank crises and saved his country from the Great Depression with an innovative range of pre-Keynesian macroeconomic policies. However his attempts to cut military spending ran into intense opposition from the Japanese military who were intent on invading Manchuria, and a group of fanatic soldiers ultimately assassinated him.

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