Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

Great Expectations and the End of the Depression

Gauti B. Eggertsson
The American Economic Review
Vol. 98, No. 4 (Sep., 2008), pp. 1476-1516
Stable URL: http://www.jstor.org/stable/29730131
Page Count: 41
  • Download ($10.00)
  • Subscribe ($19.50)
  • Cite this Item
Great Expectations and the End of the Depression
Preview not available

Abstract

This paper suggests that the US recovery from the Great Depression was driven by a shift in expectations. This shift was caused by President Franklin Delano Roosevelt's policy actions. On the monetary policy side, Roosevelt abolished the gold standard and—even more importantly—announced the explicit objective of inflating the price level to pre-Depression levels. On the fiscal policy side, Roosevelt expanded real and deficit spending, which made his policy objective credible. These actions violated prevailing policy dogmas and initiated a policy regime change as in Sargent (1983) and Temin and Wigmore (1990). The economic consequences of Roosevelt are evaluated in a dynamic stochastic general equilibrium model with nominal frictions.

Page Thumbnails

  • Thumbnail: Page 
1476
    1476
  • Thumbnail: Page 
1477
    1477
  • Thumbnail: Page 
1478
    1478
  • Thumbnail: Page 
1479
    1479
  • Thumbnail: Page 
1480
    1480
  • Thumbnail: Page 
1481
    1481
  • Thumbnail: Page 
1482
    1482
  • Thumbnail: Page 
1483
    1483
  • Thumbnail: Page 
1484
    1484
  • Thumbnail: Page 
1485
    1485
  • Thumbnail: Page 
1486
    1486
  • Thumbnail: Page 
1487
    1487
  • Thumbnail: Page 
1488
    1488
  • Thumbnail: Page 
1489
    1489
  • Thumbnail: Page 
1490
    1490
  • Thumbnail: Page 
1491
    1491
  • Thumbnail: Page 
1492
    1492
  • Thumbnail: Page 
1493
    1493
  • Thumbnail: Page 
1494
    1494
  • Thumbnail: Page 
1495
    1495
  • Thumbnail: Page 
1496
    1496
  • Thumbnail: Page 
1497
    1497
  • Thumbnail: Page 
1498
    1498
  • Thumbnail: Page 
1499
    1499
  • Thumbnail: Page 
1500
    1500
  • Thumbnail: Page 
1501
    1501
  • Thumbnail: Page 
1502
    1502
  • Thumbnail: Page 
1503
    1503
  • Thumbnail: Page 
1504
    1504
  • Thumbnail: Page 
1505
    1505
  • Thumbnail: Page 
1506
    1506
  • Thumbnail: Page 
1507
    1507
  • Thumbnail: Page 
1508
    1508
  • Thumbnail: Page 
1509
    1509
  • Thumbnail: Page 
1510
    1510
  • Thumbnail: Page 
1511
    1511
  • Thumbnail: Page 
1512
    1512
  • Thumbnail: Page 
1513
    1513
  • Thumbnail: Page 
1514
    1514
  • Thumbnail: Page 
1515
    1515
  • Thumbnail: Page 
1516
    1516