Nation | Real GDP Loss | Years of ContractionWhat leaps out of the data for me is Austria.
(1) Austria | -22.45% | 1929–1933
(2) Poland | -20.70% | 1930–1933
(3) Czechoslovakia | -18.19% | 1930–1935
(4) Germany | -16.11% | 1929–1932
(5) France | -14.65% | 1930–1932
(6) Yugoslavia | -13.69% | 1930–1932
(7) Bulgaria | -12.72% | 1934–1935
(8) Netherlands | -9.46% | 1930–1934
(9) Hungary | -9.36% | 1930–1932
(10) Switzerland | -8.02% | 1930–1932
(11) Belgium | -7.89% | 1929–1932
(12) Norway | -7.75% | 1931
(13) Sweden | -6.20% | 1931–1932
(14) UK | -5.80% | 1930–1931
(15) Romania | -5.57% | 1932
(16) Italy | -5.47% | 1930–1931
(17) Romania | -4.57% | 1929
(18) Finland | -3.97% | 1930–1932
(19) Denmark | -2.62% | 1932
(20) Bulgaria | -1.91%* | 1929
* The recession in Bulgaria in 1929 may not actually have been caused by the Great Depression, but by Bulgaria’s deflationary return to the Gold Standard in 1928.
Austria had the worst depression in Europe (amongst the nations examined above) in terms of real GDP loss, which can be seen in the graph below. After a terrible real output collapse of -22.45% from 1929 to 1933, essentially stagnation followed until 1936. A uptick occurred in 1937, but in 1938 Austria was seized by Nazi Germany and entered a different economic system. The first years of the Nazi Regime are shown in the ellipse.
Curiously, the Austrian government (and from 1933 the dictatorship) was taking some kind of policy advice from Ludwig von Mises – patron saint of Austrian economics.
Aside from some corporatist interventions, successive Austrian governments pursued deflationary policies, budget balancing and austerity. It is likely that Mises would have strongly approved of the latter measures. And what do you know? Worst depression in Europe (as far as I know).
If we look at Austrian unemployment during the 1930s which can be seen in the graph below, it was remarkably bad too: it shows no real recovery until after the Anschluss (12 March, 1938).
Of course, I am being a bit rhetorical here. No, I do not think Mises was really to blame for the depth of the depression in Austria. Plenty of other nations pursued austerity too and had severe depressions.
But, as a policy adviser to the Austrian government, whatever contractionary policies that Mises recommended and that were in fact followed were clearly disastrous.
To be fair, there may have been other factors that account for the depth of the depression in Austria: perhaps its banking system collapsed to a greater extent than other nations, and perhaps it was exposed to international trade to a far greater extent.
Still, the data makes you wonder.
