Great Crash Research Articles

Could Diffusion Indexes Have Forecasted the Great Depression?

ABSTRACTWas the Depression forecastable? In this paper, we test how effective diffusion indexes are in forecasting the deepest recession in US history: the Great Depression. In a seminal paper, Moore considered the effectiveness of diffusion indexes, though retrospectively and not out‐of‐sample. We reconstruct Moore's diffusion indexes for this historical period and make our own comparable indexes for out‐of‐sample predictions. We find that diffusion indexes, including the horizon‐specific ones we produce, can nowcast turning points fairly well. Forecasting remains difficult, but our results suggest that the initial downturn in 1929 may be forecastable months before the Great Crash. This is a novel result, as previous authors had generally found the Depression was not forecastable.

Young Consumers Perception on Femvertising

In the world of marketing, the word femvertising plays a dramatic change in India which influences the women consumers ‘perception towards the gender portrayal of advertising. In today‘s advertisement the women empowerment has a great crash in the purchase behavior . which in turn generates profit for the business and also creates gender equality in the society where it becomes the leading theme in the advertisement sector. Most of the advertisement projects focused more on women and give equal rights irrespective of gender. The marketer‘s started portraying women as a strong self-sufficient. Research design adopted in this study is empirical and it depends upon primary data. A sample of 100 consumers is chosen for the study. This article investigates how the attitude towards advertising in general and changes in gender portrayals in advertising in the modern era and how it explores the awareness among young consumers.

Biophysical economic interpretation of the Great Depression: A critical period of an energy transition

AbstractThe objective of this paper is to explain the cause and proceedings of the 1930s Great Depression from a biophysical economic perspective. The Depression was a painful episode in the socio‐technological transition from a coal/railroad regime to one based on hydrocarbons, motor vehicles, and electricity. The beginning—the Great Crash of October 1929—corresponded with drastic cuts in oil prices and announcement of oil supply certainty, following discovery of huge oilfields in the US Southwest. The Depression principally centered on a change from railroads to motor‐vehicle‐based transportation, but was long and drawn‐out due to the hegemonic power that the railroads held over the US economy. The late 1920s saw increased use of hydrocarbon‐based technologies, but the emerging technologies were still reliant on the old technological system. Methods of biophysical economics, mapping energy flows to capital formation, show the critical role of railroads in the Depression. In 1929, railroads accounted for 24% of the non‐residential capital stock; they delivered between 70% and 76% of energy needs; and 69% of energy required for capital formation. Thus a hypothesis emerges that dwindling investment in the railroads was a major constraint on the economy. In biophysical terms, the US economy's main energy delivery system—coal carried by railcars—was hamstrung. Energy flow Sankey diagrams for 1929 and 1939 show the gradual change in energy systems that occurred over the Depression.

The New Economics: A Manifesto

Steve Keen has written an important book that should spark the interest of economists and others interested in pressing economic problems. It contains six chapters. The introductory chapter is entitled ‘Why this manifesto?’ It argues that economics is in a bad state and that a Kuhnian paradigm shift is required to overcome the limitations of the neoclassical approach. Although the necessary changes have been long resisted, such a paradigm change is now deemed possible because of (i) ‘the development of … computer software that can easily handle large-scale dynamic and even evolutionary processes’ (p. 14), (ii) the development of post-Keynesian, and other non-neoclassical theory in recent decades, particularly the ‘modern monetary theory’ of Warren Mosler, Randall Wray, Stephanie Kelton, and others, and (iii) the upsurge of protest by economics students and others against the alleged failure of their teachers to explain the Great Crash of 2008 or to take it seriously as a problem for mainstream economics.

Does an Empirical Economic Relation Have a Life?

Does an Empirical Economic Relation Have a Life?

Papal Jurisprudence, 385-1234: Social Origins and Medieval Reception of Canon Law by David L. d'Avray

Reviewed by: Papal Jurisprudence, 385-1234: Social Origins and Medieval Reception of Canon Law by David L. d'Avray Michael Edward Moore d'Avray, David L. Papal Jurisprudence, 385-1234: Social Origins and Medieval Reception of Canon Law. Cambridge: Cambridge University Press, 2022. $99.99. Pp. 300. ISBN: 978-1-10867-143-9. In this tightly woven, carefully argued book, the rise of thirteenth-century legal science is explained as the return, or the awkward persistence, of old papal law in new contexts, and the corresponding need for exposition, explanation, and decision-making to resolve complex situations in which the old laws did not readily correspond to a new historical world. This argument is not only about the 'new' situation of ecclesiastical life and jurisprudence from 1100 to 1234, but the long-enduring presence of old papal decisions from the period 400 to 500. How did the old law serve in new situations 700 years later? D'Avray contends that in considering the history of papal jurisprudence, as it flowed into the schools in the age of Johannes Teutonicus and the Liber Extra, the historian must account for two major ages, two key sets of problems, and two principal historical contexts: the first wave and the second wave of papal decretals. 'The main focus of this study is on the parallels and connections between the two decretal ages' (193). Indeed, one of the strong theses of d'Avray book is the existence and mutual reflection of two decretal ages (5th century / 12th century). If the long history of papal law can be described as a structure, it has the shape of a barbell graph. These parallel phases of papal-legal history mirror one another and are also termed 'the first and second decretal waves, c.400 and c. 1200' (213). The book is not concerned to provide a detailed narrative sweeping over all those centuries. Instead, short précis of changing historical circumstances are presented at certain key points in order to demonstrate the dramatic changes leading up to the first and second periods of papal jurisprudence. The scaffolding of European history is somewhat in the background, but helps to explain and orient readers to legal changes. The fall [End Page 217] of the Roman Empire is presented as a great crash, in the strong versions of Peter Heather (106) and Julia Smith (218), rather than the current fashion for seeing continuity instead. There is Peter Brown's thesis that Christianity brought a total change of mentality about death, a re-negotiated social world and the erection of a new cosmos (4). And there is Ian Wood's view that massive transfers of wealth in late antiquity allowed for the substantial take-off of the Church (107). The fall of Rome did not mean the fall of the City, which was able to provide an exceptional degree of intellectual and institutional continuity. In some fine passages d'Avray expresses the nature of Roman memory and continuity as embodied in building programs such as the basilica of Maria Maggiore (107-108). The letters of Pope Leo the Great are similarly described as monuments of memory and recordation (119). After the demise of Attila and the collapse of the Hunnic project, the City of Rome began to take center stage in western Europe (23-24). Carolingian history is briefly alluded to as the frame for the Admonitio Generalis. And so on to the rise of the Ottonian Empire and the dispersal of wealth and political power in post-millenial Europe. D'Avray's analysis of the period 1050-1150 is fascinating. The situation of the clergy had changed. No longer part of a cohesive late antique urban world, the early medieval clergy now found themselves in an agricultural countryside beset by small competing political principalities. Now they lived in the shadow of lords and castles: this was 'a world of rural parishes, utterly different from the original context'—i.e. the context of the old papal decretals regarding such matters as priestly marriage and priestly sexual activity (177). It was not the rise of towns in the early Middle Ages that accounts for the Investiture Controversy and the papal turn...

HUMBLE PIE IS COLD COMFORT Comment on M. Sandel’s The Tyranny of Merit

HUMBLE PIE IS COLD COMFORT Comment on M. Sandel’s <i>The Tyranny of Merit</i>

Effect of Economic Policy Uncertainty on the investment in numismatic assets: Evidence for the Walking Liberty Half Dollar

This study proposes to analyse the numismatic assets investment under Economic Policy Uncertainty (EPU). By applying a panel data approach to a sample of 25 different coins minted between 1916 and 1947 and valued annually from 2000 to 2019, it is shown that investing in the Walking Liberty Half Dollar can be considered a safe-haven asset when faced with EPU. However, of all the coins, only those minted during the Great Crash of 1929 and Second World War fulfil this characteristic. These findings have significant implications for investors, providing them with an attractive alternative investment in times of high EPU.

Constructing Continuity: The Discursive Construction of the Great Crash of 2008–2009 as a Non-crisis of Neoliberalism

ABSTRACT Why, despite being contextualised alongside the Great Depression of the 1930s and inflation and growth crisis of the 1970s, did the Great Crash of 2008–2009 not exert a similarly transformative dynamic in dominant, neoliberal, economic ideas? Drawing on an agent-centred constructivism stressing the centrality of crisis construction and narration, yet with particular emphasis placed upon the incorporation of strategic processes of framing, this article provides fresh insights into the means by which key actors exercise their agency in attempts to ensure continuing adherence to, rather than fundamentally transforming, the status quo. This is explored with reference to macroeconomic policy assumptions in the IMF, an instance which provided all the pre-conditions for a widely interpreted moment of crisis, yet which nevertheless resulted in untransformed ideas and structures.

Gestalt flip or gestalt flip-flop? The impact of the Great Crash on fiscal policy assumptions in the IMF

This paper contributes to ongoing debates surrounding the impact of the Great Crash on change or continuity in fiscal policy assumptions in the IMF, and in doing so, foregrounds two variables that have been given short shrift in the existing literature: the multiple levels of economic ideas; and the dynamic, evolving, multi-phase nature of moments of political-economic failure. Drawing on this nuanced appreciation of the complexities and dimensions of moments of uncertainty, the central argument of this paper is that notwithstanding the beginnings of a potential gestalt flip during the most acute phase of the Great Crash, the IMF nevertheless remains a long way from jettisoning prior orthodoxies, despite some evidence of inter-paradigm borrowing in response to concerns of secular stagnation in advanced economies.

Will the World’s Glass after the Coronavirus Pandemic Be Half-Empty or Half-Full?

AbstractThe author comments on the political and economic options in the wake of the coronavirus pandemic that started at the beginning of 2020. She revisits responses to the crises of the First World War, the Great Crash of 1929, and the Second World War, sorting them into ‘pessimistic’ and ‘optimistic’ responses, and outlining their respective consequences.

Can We Rebuild the Economic Consensus?

There are times in history when the consensus about our economic system breaks down. It happened after the Long Depression, also known as the Great Depression of the 19th century, and again in the 20th century around the Great Depression of 1929-1933, as well as after the Great Recession of 2008-2009 that followed the global financial crisis. The Covid-19 great crash, which carries the risk of a deep downturn, has led governments to take extraordinary measures in all areas of our lives. This has further fuelled the need to discuss how to rebuild the consensus about the most appropriate economic system for the 21st century as the great question of our time. This is a reflection piece invited for the Dahrendorf Symposium.

A MONOPOLY SUPPLIER OF REGULATION: THE U.S. GAMBLING MODEL

A MONOPOLY SUPPLIER OF REGULATION: THE U.S. GAMBLING MODEL

Perceptions and attitudes toward risk and personal responsibility in the context of medical fitness to drive

Objective: Although there is a considerable body of literature probing the knowledge and awareness of doctors of guidelines on medical fitness to drive, little is known of knowledge and awareness of such guidelines among the general public. We investigated awareness, perceptions and attitudes among a range of adults toward risk and personal responsibility in the context of medical fitness to drive.Methods: This quasi-experimental between groups study assessed response differences between healthcare (33%) and non-healthcare professionals. Five hundred and fourteen adults (f = 342) completed a 15-item online survey, which assessed their license status, direct and secondhand experience with key medical conditions, perceptions of risk, driving intentions if advised to stop driving by a doctor and beliefs about responsibility for ensuring driver fitness.Results: Most of the participants had a driver license. Although the majority (87%) had no first-hand experience with key medical conditions contained in the Irish medical fitness to drive guidelines, two-thirds knew someone with at least one of these conditions. No participant admitted to an alcohol or drug misuse/dependence problem. Alcohol misuse/dependence and fatigue/chronic sleep loss were perceived as the greatest crash risk for drivers and for vulnerable road users. Risk perceptions in general public and the medical professionals were similar for most conditions but where they differed, the medical professionals perceived lower risk. Most respondents indicated that they would cease driving immediately if advised by their doctor for temporary and long-term conditions. No effects of age, gender, experience with medical conditions or professional status were noted on perceived intentions to cease driving. Perceptions about who is responsible for ensuring people are fit to drive fell into two categories. Drivers were perceived as chiefly responsible where alcohol, non-prescription drugs, fatigue and age were factors and doctors were identified as responsible in cases of diabetes, epilepsy, stroke, heart conditions and physical disabilities.Conclusions: These results suggest that more needs to be done to raise awareness of the risks posed by medical and other factors that reduce driver capability and also about drivers’ responsibility to ensure that they are fit to drive and thus improve road safety.

The Role of Sentiment in the Economy of the 1920s

John Maynard Keynes composed The General Theory as a response to the Great Crash and Great Depression with all their devastating consequences for the US macro economy and financial markets, as well as the rest of the world. The role of expectations his new theory set out has been widely accepted. The role of animal spirits he proscribed (i.e. the role of emotion in cognition) has remained much more controversial. We analyse over two million digitally stored news articles from The Wall St Journal to construct a sentiment series that we use to measure the role of emotion at the time Keynes wrote. An eight variable vector error correction model is then used to identify shocks to sentiment that are orthogonal to the fundamentals of the economy. We show that the identified pure sentiment shocks do have statistically and economically significant effects on output, money supply (M2), and the stock market for periods of the 1920s.

Optimization of post weld heat treatment cycle of fiber laser welded bainitic steel

Automobile industry has always been in look out for advanced materials that would account for greater crash resistance, high fatigue strength, optimum ductility and longer service life despite heavy mechanical loads applied on these engine components. These critical requirements are met through maintaining the complex microstructures and optimum phase constituents. The retention of microstructural constituents has always been a key parameter while fabricating these advanced automobile materials by fusion welding process. Carbide free bainitic steels are emerging out to be the candidate materials for automobile applications. Owing to their microstructure consisting fine bainitic ferrite laths that are interwoven with retained austenite in their lath boundaries. The fine Bainitic laths provide enough strength and the retained austenite phase facilitates the desired ductility. The current paper critically discusses the microstructural and microhardness variation across the zones during Fiber Laser welding of bainitic steel sheets. Keeping the phase transformations during welding in view, post weld heat treatments were undertaken. The welded steel was austenitized at 820 OC, rapidly cooled to 390 OC, and soaked at different durations before furnace cooing. The microstructure variation and microhardness profiling were done at all these heat treatment conditions. Basing on the analyses, the heat treatment cycle has been optimized.

The Great Crash of 1929: A Look Back After 90 Years

The Great Crash of 1929 ranks among the climactic events of the last century, apparently heralding the beginning of the Great Depression. This event raises at least four questions that are relevant today: Why did the “Roaring 20s” roar? Some prominent contemporaries held that the decade roared because of consumerism, credit growth, and the Jazz Age. However, recent research suggests an alternative explanation: a revolution in manufacturing and technology that amplified economic growth and volatility in markets. Was the boom in equities a “bubble?” Both the authors’ research and other studies show surprisingly weak evidence of a bubble. The boom probably reflected the technology shock of the ‘20s. If there was a bubble, it was limited in time, breadth, and impact. What caused the Crash? The onset of an ordinary recession, surprising changes in monetary policy by the Fed, growing regulation, and rising protectionism all help to explain a sharp and sudden change in investor sentiment. Did the Crash cause the Great Depression, as popular opinion has long maintained? No. The cycle of economic contraction had begun well before the crash. Furthermore, the wealth effect of the Crash was limited. The pivot from recession into Great Depression reflected the abandonment of the Gold Exchange Standard, a wave of bank panics and collapse of credit, protectionism, and a number of maladroit public policies. But if the Crash did not cause the Depression, it probably amplified the effects of forces already at work. Answers to these questions, illuminated by careful research, remind decision‐makers in business and government that the first explanations for historical events are not always the best, that complex systems have unintended consequences, and that gaps in information make the Great Crash a difficult standard by which to assess future events. The use of historical precedent warrants caution and great humility in the makers of public policy.

The Great Crash of 1929 and the Great Depression in the Global Context

The 1920s often called the “Golden 20s” because the equity markets were booming but there were a series of structural issues. Only a few years after the 1st World War the global economy was still suffering from the consequences of the brutal war. The market crash of 1929 came unexpected and shocked the world. It is considered a unique, five sigma event, occurring only once in a lifetime. This paper covers the period before, during and after the Great Crash on Wall Street.

The Role of Speculators in the Market Crash of 1929

90 years ago – in October 1929 – the crash on Wall Street created chaos in the financial markets. The Great Crash of 1929 led to the Great Depression the longest period of unemployment and contraction in modern history. The market crash of 1929 is considered a unique, five sigma event, occurring only once-in–a-lifetime. Seventy nine years after the Great Crash of 1929 (GC), the financial markets collapsed again in the Global Financial Crisis of 2008 (GFC) and threatened the financial stability of the world like in 1929. Explanations for the causes of a market crash can range from overindebtedness, asset bubbles, speculation to massive leverage in the system. Crises can have different forms ranging from classic hunger crises to modern forms of demand crises, corporate crises and financial market crises. While the causes of a hunger crisis is often the result of a series of poor harvest, the causes of a financial market crisis can be complex and are not always easy to identify. In this paper I focus on the worst financial market crisis in history the GC in the USA. It was argued that funds and short sellers were the culprits of the crisis, and that they benefited from it. This paper covers the speculators in the GC by analysing their role, their strategies and their returns. I introduce an analysis of the role of speculators in their function as either liquidity providers or liquidity takers. As far as the theory of speculation is concerned I use Minsky’s Financial Instability Hypothesis. The analysis shows that in a systematic crisis there are no winners and there is no place to hide.

The Cowles Commission and Foundation for Research in Economics

Founded in 1932 by a newspaper heir disillusioned by the failure of forecasters to predict the Great Crash, the Cowles Commission promoted the use of formal mathematical and statistical methods in economics, initially through summer research conferences in Colorado and through support of the Econometric Society (of which Alfred Cowles was secretary-treasurer for decades). After moving to the University of Chicago in 1939, the Cowles Commission sponsored works, many later honored with Nobel Prizes but at the time out of the mainstream of economics, by Haavelmo, Hurwicz and Koopmans on econometrics, Arrow and Debreu on general equilibrium, Yntema and Mosak on general equilibrium in international trade theory, Arrow on social choice, Koopmans on activity analysis, Klein on macroeconometric modelling, Lange, Marschak and Patinkin on macroeconomic theory, and Markowitz on portfolio choice, but came into intense methodological, ideological and personal conflict with the emerging “Chicago school.” This conflict led the Cowles Commission to move to Yale in 1955 as the Cowles Foundation, directed by James Tobin (who had declined to move to Chicago to direct it). The Cowles Foundation remained a leader in the more technical areas of economics, notably with Tobin’s “Yale school” of monetary theory, Scarf’s computable general equilibrium, Shubik in game theory, and later Phillips and Andrews in econometric theory but as formal methods in economic theory and econometrics pervaded the discipline of economics, Cowles (like the Econometric Society) became less distinct from the rest of economics. This entry is part of an archivally-based history of the Cowles Commission and Foundation commissioned by the Cowles Foundation.