The Great Depression in Belgium from a Neo-Classical Perspective

Pensieroso, Luca
(2007)

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This paper casts the Belgian Great Depression of the 1930s within a dynamic stochastic general equilibrium (DSGE) framework. Results show that a total factor productivity shock within a standard real business cycle model is unsatisfactory. Introducing war expectations in the baseline model produces little improvement. Given the evidence on sticky wages put forward by historians, it shows that a simple DSGE model with sticky wages la Taylor improves on the results.
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Pensieroso, L. (2007). The Great Depression in Belgium from a Neo-Classical Perspective (ECON Working Papers 2007/25). https://hdl.handle.net/2078.5/33012