The voice of Econ Journal Watch

The host of EJW Audio is Lawrence H. White, a co-editor of EJW and professor of economics at George Mason University.

In each EJW Audio podcast, Professor White and the author of a recent EJW article discuss that article and related issues.

Episode 1: Steven Horwitz on the 1930s and beyond.

MP3 File

Professor Horwitz discusses his article in the September 2009 issue of EJW, entitled:

“Great Apprehensions, Prolonged Depression: Gauti Eggertsson on the 1930s”

The conversation covers the main points of the article, which are described in the article’s abstract:

Abstract: Gauti Eggertsson uses a dynamic stochastic general equilibrium model in arguing that the period 1933 to 1937 represented recovery from the Great Depression, by virtue of regime change between the Hoover and Roosevelt administrations. He claims that the Hoover administration was defined by adherence to three “policy dogmas,” and that Roosevelt shifted expectations for the better by making credible commitments rejecting those dogmas. Eggertsson’s argument is wrong on several counts. He misrepresents Hoover’s economic policies, he mischaracterizes Roosevelt as “dogma-free” and committed to a clear alternative plan for recovery, and he misreads the economic consequences of Roosevelt’s policies. Eggertsson’s problems begin with his notion of “recovery,” wherein the economy’s progression from critical condition to prolonged infirmity is trumpeted as “recovery.” Eggertsson’s article is entitled “Great Expectations;” I have titled this piece “Great Apprehensions” because the Hoover-Roosevelt period needs to be seen a whole, in which the statist trend of policy and rhetoric created great uncertainty about the rules under which enterprise and investment would proceed. Moreover, Eggertsson’s narrative cutoff at 1937 is misleading and opportunistic, as the ensuing years are all part of the same prolonged apprehension and under-performance.

Links:

Robert Higgs, “Regime Uncertainty: Why the Great Depression Lasted So Long and Why Prosperity Returned after the War,” The Independent Review, 1997.

Robert Higgs, Depression, War, and Cold War: Challenging the Myths of Conflict and Prosperity, Oxford University Press, 2006.

Steven Horwitz, “Great Apprehensions, Prolonged Depression: Gauti Eggertsson on the 1930s,” Econ Journal Watch, September 2009.

Richard Timberlake, “Gold Standards and the Real Bills Doctrine in U.S. Monetary Policy,” Econ Journal Watch, August 2005.

Steven Horwitz, “The “Great Recession” as the Institutional and Ideological Residue of the Great Depression,” public lecture at Georgia State University, March 2009.