DP4191 | A Heliocentric Journey into Germany's Great Depression

Author(s)

Mark Weder

Publication Date

23/01/2004

JEL Code(s)

  • E32, N14

Keyword(s)

  • Indeterminacy, Great Depression, Germany, Applied dynamic General Equilibrium

Programme Area(s)

  • International Macroeconomics

Network(s)

Abstract

The Paper finds empirical evidence on the ripple effect of sunspots on the interwar German economy. It identifies a sequence of negative shocks to expectations for the 1927-32 period. The artificial economy predicts the 1928-32 depression and a long boom from 1933 onwards. Overall, a tangible fraction of interwar output volatility is attributed for by sunspots.