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ABSTRACTS IN ECONOMIC HISTORY
(c) 2001 EH.Net
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Name: Albrecht Ritschl
Email: ritschl@iew.unizh.ch
Institution: University of Zurich
Co-author: none
Title: Deficit Spending in the Nazi Recovery, 1933-1938: A Critical
Reassessment
Internet Address of abstracted work:
http://papers.ssrn.com/sol3/papers.cfm?cfid=453948&cftoken=46486395&abstract_id=259264
By mail:
Albrecht Ritschl
IEW, University of Zurich
Raemistrasse 64
CH 8001 Zurich / Switzerland
Language: English
Abstract:
This paper examines the effects of deficits spending and
work-creation on the Nazi recovery. Although deficits were
substantial and full employment was reached within four years,
archival data on public deficits suggest that their fiscal impulse
was too small to account for the speed of recovery. VAR forecasts of
output using fiscal and monetary policy instruments also suggest only
a minor role for active policy during the recovery. Nazi policies
deliberately crowded out private demand to ensure high rates of
rearmament. Military spending dominated civilian work-creation
already in 1934. Investment in autobahn construction was minimal
during the recovery and gained momentum only in 1936 when full
employment was approaching. Continued fiscal and monetary expansion
after that date may have prevented the economy from sliding back into
recession. We find some effects of the Four Years Plan of late 1936,
which boosted government spending further and tightened public
control over the economy.
Bibliography: Ritschl, Albrecht. "Deficit Spending in the Nazi
Recovery, 1933-1938: A Critical Reassessment." University of Zurich
Working Paper No. 68, December 2000 .
Subject: V
Geographical Area: 4
Country/Region: Germany
Time Period: 8
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