Please use this identifier to cite or link to this item:
|Title:||Technology, credit and confidence during the roaring twenties|
|Citation:||Proceedings of the 2008 Southern Workshop in Macroeconomics, 2008 / pp.1-30|
|Publisher:||University of Auckland|
|Publisher Place:||New Zealand|
|Series/Report no.:||Working Papers ; 901|
|Conference Name:||Southern Workshop in Macroeconomics (28 Mar 2008 : Auckland)|
|Sharon G. Harrison and Mark Weder|
|Abstract:||We compare and contrast alternative explanations of the Roaring Twenties. Starting with the RBC model as a benchmark, we also examine a model with indeterminacy and self-fulfilling expectations (SFE), and one with credit shocks. Historical and anecdotal evidence provides support for each of these set-ups. We use US data from 1889-1953 to estimate each of the relevant shocks, and the resulting model-driven output. Our results indicate that all three models replicate well the experience of the 1920s. We then estimate "horserace" regressions, which provide evidence of the explanatory power of each model above and beyond the others. Here the SFE model emerges as the winner, leading us to conclude that self-fulfilling confidence was the primary driving force behind the Roaring Twenties.|
|Keywords:||Sunspots; Indeterminacy; Credit Shocks; Roaring Twenties|
|Appears in Collections:||Economics publications|
Files in This Item:
There are no files associated with this item.
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.