Great Depression impacted India as well

Christina Romer in a superb paper on Great Depression summarises the causes, recovery of Great Depression. She also provides information on how Great Depression in US spilled to other economies.

This table which shows when depression began quarter-wise in each economy and recovery began is quite interesting:

 

Depression began

Recovery began

United States

1929:3

1933:2

Great Britain

1930:1

1932:4

Germany

1928:1

1932:3

France

1930:2

1932:3

Canada

1929:2

1933:2

Switzerland

1929:4

1933:1

Czechoslovakia

1929:4

1933:2

Italy

1929:3

1933:1

Belgium

1929:3

1932:4

Netherlands

1929:4

1933:2

Sweden

1930:2

1932:3

Denmark

1930:4

1933:2

Poland

1929:1

1933:2

Argentina

1929:2

1932:1

Brazil

1928:3

1931:4

Japan

1930:1

1932:3

India

1929:4

1931:4

South Africa

1930:1

1933:1

So, in US it started in Q3 1929 and recovery began in Q2 1933, in UK it started in Q1 1930 and recovery started in Q4 1932. Surprisingly, In Canada and Germany (in Germany it started in Q1 1928) the economy worsened before it did in US. In Italy, Belgium, Argentina, Poland, Brazil it started with US in Q3 1929.

As far as recovery is concerned, US is the last to start recovery in Q2 1933 along with Canada, Czechoslovakia, Denmark, Poland.

What was even more interesting is India is in the list as well. The Depression started in India around Q4 1929 (one quarter after US). The recovery started in Q4 1931 implying India came out quickest in the list.

This is quite interesting – India was impacted by the Great Depression as well. I don’t have statistics to see what was the impact like on growth (did GDP decline by 30%  like in US) , inflation (did India face deflation too) etc.

What I am also interested in finding is how the Great Depression that impacted India? What were the channels?  India was a British colony then so one channel could be that Depression in UK impacted India (a comparison with other UK colonies during this time would also be very interesting). Other channel could be that US originated Depression impacted India directly as Indian economy was open to trade and financial flows.

Interesting avenues for further research and makes a good PHD thesis topic. If readers come across any papers on the topic, please send me a copy.

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10 Responses to “Great Depression impacted India as well”

  1. Denmark » me Says:

    [...] Great Depression impacted India as well « Mostly EconomicsAs far as recovery is concerned, US is the last to start recovery in Q2 1933 along with Canada, Czechoslovakia, Denmark, Poland. What was even more interesting is India is in the list as well. The Depression started in India around Q4 … [...]

  2. Amitabh Says:

    Very interesting post and equally interesting blog.

    I remember having read somewhere – needs to be confirmed – that pre-independent India’s share in World Trade was about 10%. It was mostly raw material, but it was substantial (compare this to the share in 1950, when it was about 1.8%, which then came down to less than 1%). So, it is no surprise that India would have been hit by the 1929 depression.

  3. Niranjan Says:

    Damn interesting, Amol. Thanks for this pointer.

  4. rvalive Says:

    India in the Great Depression, 1929-1939 (Perspectives in History, Vol. 6)

    India in the Great Depression, 1929-1939 (Perspectives in History, Vol. 6)

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  5. 100% Chance of Recession & Stock Market to Plunge 50-60% Says:

    [...] Great Depression impacted India as well « Mostly Economics [...]

  6. SAGAR RATH Says:

    …. DO take care… India is going to get effected by depression in and around 2009 and 2010……

  7. Global Great Depression was because of policy reverence to gold standard « Mostly Economics Says:

    [...] Depression these days what comes as surprising is that Great Depression was a global event (read Romer’s excellent paper to understand where and when did it start; it impacted India as well). Bernanke in his speech and [...]

  8. History of banking crisis in India? « Mostly Economics Says:

    [...] I combine the above findings by the Romer paper which showed Great Depression impacted India too, it can be said that we had Depression as the banking system was in a crisis as well. The [...]

  9. How did India fare in previous crises? « Mostly Economics Says:

    [...] imports and industry. I had pointed to two previous papers – one on India’s Banking crisis, Great Depression impacting India. This new paper further fills the [...]

  10. disha damaria Says:

    india was uk’s single largest market in the year 1929, with its exports to india at rs.730 million, making up over 1/6th of the country’s total exports. this is the reason why even india was under the impact of great depression.

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