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Deficit Spending in the Nazi Recovery, 1933-1938: A Critical Reassessment


Ritschl, Albrecht (2000). Deficit Spending in the Nazi Recovery, 1933-1938: A Critical Reassessment. Working paper series / Institute for Empirical Research in Economics No. 68, University of Zurich.

Abstract

This paper examines the effects of deficits spending on the Nazi recovery. Although deficits were substantial and full employment was reached within four years, 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. 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. We find some effects of the Four Years Plan of late 1936, which boosted government spending further and tightened public control over the economy.

Abstract

This paper examines the effects of deficits spending on the Nazi recovery. Although deficits were substantial and full employment was reached within four years, 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. 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. We find some effects of the Four Years Plan of late 1936, which boosted government spending further and tightened public control over the economy.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Institute for Empirical Research in Economics (former)
Dewey Decimal Classification:330 Economics
Language:English
Date:December 2000
Deposited On:29 Nov 2011 21:26
Last Modified:12 Aug 2017 12:50
Series Name:Working paper series / Institute for Empirical Research in Economics
ISSN:1424-0459
Official URL:http://www.econ.uzh.ch/wp.html

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