Miniconference on Macroeconomic History.

• Position: Conferences

Miniconference on Macroeconomic History

On June 2, the NBER held a miniconference on macroeconomic history in Cambridge. NBER researchers N. Gregory Mankiw, Harvard University, and Christina D. Romer, University of California at Berkeley, organized the following program:

Peter Temin, NBER and MIT, "The Midas Touch: The

Spread of the Great Depression"

Discussant: Kathryn M. Dominguez, NBER and

Harvard University

Eugene White, Rutgers University, "When the Ticker

Ran Late: The Stock Market Boom and Crash of

1929"

Discussant: Robert B. Barsky, NBER and University

of Chicago

Bennett T. McCallum, NBER and Carnegie-Mellon

University, "Could a Monetary Base Rule Have

Prevented the Great Depression?"

Discussant: Frederic S. Mishkin, NBER and Columbia

University

Discussion of New Historical Macroeconomic Data

Angela Redish, University of British Columbia, "The

Evolution of the Gold Standard in England"

Discussant: J. Bradford De Long, NBER and Harvard

University

Michael D. Bordo, NBER and Rutgers University,

and Finn Kydland, Carnegie-Mellon University,

"THe Gold Standard as a Rule"

Discussant: Barry J. Eichengreen, NBER and

University of California at Berkeley

Temin argues that the depth of the Great Depression was caused by the unyielding commitment to the gold standard by fiscal and monetary authorities in the large industrial countries. They attempted to deflate their economies to restore international equilibrium, but they succeeded only in the first of these aims. The downturn became the Great Depression as a result of the continuation of deflationary policies long after the decline was underway.

Although the stock market boom and bust are important parts of all accounts of the Great Depression, they have received very little scholarly attention. White surveys the various explanations offered for the rise and collapse of stock prices and finds that easy credit played no role in the stock market boom. Instead, the market drew its strength from the long economic expansion of the 1920s, which produced higher earnings and dividends. However, the rise in stock prices outstripped these fundamentals and was the product of structural changes in the economy, accompanied by a shift in corporate finance. A number of explanations have been offered for the crash, but it was the combined effects of a recession and very tight credit that brought it to an end.

McCallum investigates a monetary rule under which the monetary base is set to keep nominal GNP...