Agustín Bénétrix

This is a VOXEU column together with Miguel Almunia, Barry Eichengreen, Kevin H. O’Rourke and Gisela Rua.

There is one important source of information on the effectiveness of monetary and fiscal stimulus in an environment of near-zero interest rates, dysfunctional banking systems and heightened risk aversion that has not been fully exploited: the 1930s. This column gathers data on growth, budgets and central bank policy rates for 27 countries covering the period 1925-39 and shows that where fiscal policy was tried, it was effective.

Find the rest of this column here.