Price Flexibility, Credit Rationing, and Economic Fluctuations: Evidence from the U.S., 1879-1914

摘要: The reawakening of interest in links between price flexibility and fluctuations economic activity calls for a reconsideration models quantity adjustment. We examine relationships credit disturbances real under flexible prices, using monthly data on financial variables over the period from 1879-1914. Recent theoretical empirical work has focused institutions post World War II period. Historical episodes pronounced business cycles, however, challenge our present formulations causes output employment. In this paper we pursue two goals: (i) to demonstrate that substantial existed during point out relying sticky prices are not appropriate analyzing period, (ii) consider effects deflationary shocks such world. Our principal findings two. First, evidence several tests corroborate stylized fact study (relative patterns observed postwar data). Contrary conclusions many applied data, find inflation rates produce positive persistent output.Second, extending earlier examinations rationing as an outcome imperfect information, motivate link by considering impact deflation availability. addition measures accompanying contributes substantially explanation period.