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DP4191 A Heliocentric Journey into Germany's Great Depression

Author(s): Mark Weder
Publication Date: January 2004
Keyword(s): indeterminacy , great depression , germany , applied dynamic general equilibrium
JEL(s): E32 , N14
Programme Areas: International Macroeconomics
Link to this Page: www.cepr.org/pubs/dps/DP4191.asp


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.

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