Why did productivity fall so much during the Great Depression

By Lee E. Ohanian. 2001

130 citations recorded by the source corpus.

Between 1929 and 1933, real output per adult fell over 30 percent and total factor productivity fell 18 percent. This productivity decrease is much larger than expected from just extrapolating the productivity decrease that typically occurs during recessions. This paper evaluates what factors may have caused this large decrease, including unmeasured factor utilization, changes in the composition of production, and increasing returns. I find that these factors combined explain less than one-third of the 18 percent decrease, and I conclude that the productivity decrease during the Great Depression remains a puzzle.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/d5c9a43573e7ad0d6c67613d4c4dfff05e63f51b

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In Economics and Econometrics

1. Nicholas Bloom
2. Efrem Castelnuovo
3. Giovanni Caggiano
4. John Van Reenen
5. Steven J. Davis
6. Edouard Schaal
7. Ruediger Bachmann
8. J. Figueres

Citations in the corpus

• The Impact of Uncertainty Shocks (2007, background): “OHANIAN, L. (2001), “Why did productivity fall so much during the Great Depression?”, American Economic Review, 91, 34-38. RAMEY, G. and RAMEY, V, (1995) “Cross-country evidence on the link between volatility and growth”, American Economic Review, 85, 1138-1151. RAMEY, V. and SHAPIRO, M, (2001) “Dis”