Great Expectations and the End of the Depression

• 成果类型: Article
• 署名作者: Eggertsson, Gauti B.
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - New York
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.98.4.1476
• 发表日期: 2008
• 页码: 1476-1516
• 关键词: nominal interest-rates; monetary-policy; liquidity trap; gold standard; general equilibrium; sticky prices; fiscal-policy; deflation; persistence; DISCRETION

摘要

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.