Department of Economics and Business Economics

American business cycles 1889–1913: An accounting approach

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  • Dou Jiang, Nanjing University of Finance & Economics
  • ,
  • Mark Weder

This paper quantitatively investigates the Depression of the 1890s and the 1907 recession in the United States. Business Cycle Accounting decomposes economic fluctuations into their contributing factors. The results suggest that both the 1890s and the 1907 recessions were primarily caused by factors that affect the efficiency wedge, i.e. slumps in the economy's factor productivity. Distortions to the labor wedge played a less important role. Models with financial market frictions that translate into the efficiency wedge are the most promising candidates for explaining the recessionary episodes.

Original languageEnglish
Article number103285
JournalJournal of Macroeconomics
Volume67
ISSN0164-0704
DOIs
Publication statusPublished - Mar 2021

    Research areas

  • Business cycles, Depression of the 1890s, Recession of 1907

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