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Economics at Arizona State University and Senior Monetary Adviser at the Federal Reserve Bank of



Minneapolis. Both are interested in the theory and the application of general equilibrium models. Kehoe's RePEc/IDEAS entry, Prescott's RePEc/IDEAS entry. EconomicDynamics: Depressions have recently received a lot of interest, witness the special issue of the Review of Economic Dynamics in 2002 and now the book you have edited. Why this sudden interest? Timothy Kehoe, Edward Prescott: In 1999 Hal Cole and Lee Ohanian published a paper in the Quarterly Review of the Federal Reserve Bank of Minneapolis that broke a long standing taboo. They analyzed the U.S. Great Depression using the neoclassical growth model. What they found was fascinating. Productivity recovered by 1935, but labor supply remained depressed by 25 percent and did not begin to recover until 1939. An important question is why. Another important question, of course, is why productivity fell so sharply starting in 1929. The Cole and Ohanian study motivated us to organize a conference at Minneapolis Fed in 2000 at which people presented analyses of great depressions in other countries using the neoclassical growth model. Six of the studies were from the interwar period and the other three from the postwar period. We encouraged the authors to work more on their papers and to submit revised versions to RED. With the help of the graduate students in our workshop, we edited a special volume of RED with these studies. Just this past year, we have published a book with revised versions of Hal and Lee's original article and the articles in the RED volume, as well as si

Year: 2010
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