The 1930s Depression in Latin America: A macro analysis

Abstract

The Depression of the 1930s continues to command attention; some urge wholesale revocation of the policy responses it engendered, while many predict its imminent return. An important trend in recent academic studies of the Depression is the broadening of the geographical range of countries analyzed, while adopting a more consciously comparative perspective.' This paper2 extends that work by analyzing selected experiences in Latin America, providing and commenting on comparisons with both Europe and North America. Its goal is to deepen our analytical understanding of the factors determining changes in prices and output during the period. The basic framework of discussion is simple aggregate supply and demand curves, various aspects of which are investigated below in the different parts of the paper, leading finally to some broad conclusions,

Economic Recovery from the Argentine Great Depression: Institutions, Expectations, and the Change of Macroeconomic Regime

“…Peripheral countries simply had much less developed government structures for managing, administering, and implementing large spending programs. This was the case throughout Latin America, for example, where Twomey (1983) discovered that few countries in the 1930s were capable of developing new fiscal programs in response to the Great Depression.…”

Economic Recovery from the Argentine Great Depression: Institutions, Expectations, and the Change of Macroeconomic Regime

“…Peripheral countries simply had much less developed govemment structures for managing, administering, and implementing large spending programs. This was the case throughout Latin America, for example, where Twomey (1983) discovered that few countries in the 1930s were capable of developing new fiscal programs in response to the Great Depression.…”

The Impact of the Great Depression in Ecuador

“…In To strengthen our data, it is important to mention the research made by Twomey (1983), who analyzed the evolution of the domestic production of six countries in Latin America, namely Argentina, Brazil, Chile, Colombia, Honduras and Mexico, concluding that after 1929 "the decline in production was greater in Chile, except in Colombia, while Honduras did not experience a typical cycle during the early part of the decade" (1983,221). In Honduras, the Gross Domestic Product increased from 1929 to 1931 by about 4%, while…”