Cliometrics and the Great Depression

The Great Depression was the worst economic disaster in American history. There were plenty of factors that helped cause the Depression, but there is still ample disagreement in the large literature on the topic as to how much weight to give each cause. In the early 1930s, the Hoover administration and congress nearly doubled federal government outlays, offered a wide range of loans, and sought voluntary efforts to combat the Depression. The economy continued to slide, and increases in tax rates in 1932 contributed to the slide. The economy finally began to grow again in 1933 as Roosevelt and a Democratic Congress developed the New Deal, a large number of new regulatory and spending programs. The 1933 trough was so deep that unemployment rates remained high throughout the decade and real GDP per person did not reach its 1929 level again until around 1939 or 1940 despite rapid growth rates. A growing literature has been evaluating the impact of the New Deal programs, and the effects of several major programs are discussed here.