American business cycles 1889-1913: An accounting approach

Dou Jiang, Mark Weder

    Research output: Contribution to journalArticle


    This paper quantitatively investigates the Depression of the 1890s and the 1907 recession in the United States. Business Cycle Accounting decomposes economic fluctuations into their contributing factors. The results suggest that both the 1890s and the 1907 recessions were primarily caused by factors that affect the efficiency wedge, i.e. slumps in the economy's factor productivity. Distortions to the labor wedge played a less important role. Models with financial market frictions that translate into the efficiency wedge are the most promising candidates for explaining the recessionary episodes.
    Original languageEnglish
    Pages (from-to)1-17
    JournalJournal of Macroeconomics
    Publication statusPublished - 2021


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