Arbeitspapier
A small open economy in the great depression: The case of Switzerland
In historical accounts of the world economic crisis of the 1930s, Switzerland is known for its staunch defense of the gold standard and the rise of corporatist policies. Yet, so far, the literature has not discussed the implications of these two features. This paper tries to show how the combination of hard-currency policy and nominal rigidities introduced by corporatist policies proved to be fatal for growth. Estimating a New Keynesian small open economy model for the period 1926-1938, we show that the decision to participate in the Gold Bloc after 1933 at an overvalued currency can be identified as the main reason for the unusual long lasting recession and that price rigidities from 1931 to 1936 significantly slowed down the adjustment process.
- Language
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Englisch
- Bibliographic citation
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Series: Working Paper ; No. 164
- Classification
-
Wirtschaft
General Aggregative Models: Keynes; Keynesian; Post-Keynesian
Business Fluctuations; Cycles
Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: Europe: 1913-
- Subject
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Great Depression
Switzerland
New Keynesian Business Cycle Model
- Event
-
Geistige Schöpfung
- (who)
-
Rosenkranz, Peter
Straumann, Tobias
Woitek, Ulrich
- Event
-
Veröffentlichung
- (who)
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University of Zurich, Department of Economics
- (where)
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Zurich
- (when)
-
2014
- DOI
-
doi:10.5167/uzh-96899
- Handle
- Last update
-
10.03.2025, 11:45 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Rosenkranz, Peter
- Straumann, Tobias
- Woitek, Ulrich
- University of Zurich, Department of Economics
Time of origin
- 2014
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