Devaluation, Exports, and Recovery from the Great Depression
Abstract
This paper evaluates how a major policy shift—the suspension of the gold standard in September 1931—affected employment outcomes in interwar Britain. We use a new high-frequency industry-level dataset and difference-in-differences techniques to isolate the impact of devaluation on exporters. At the micro level, the break from gold reduced the unemployment rate by 2.7 percentage points for export-intensive industries relative to non-export industries. At the aggregate level, this effect stimulated the labor market, the fiscal outlook, and economic growth. Devaluation was therefore an important initial spark of recovery from the depths of the Great Depression.
Fields of Study & Subjects
Historical Economic and Social Studies
Political and Economic history of UK and US
Monetary Policy and Economic Impact
Publication details
- Journal / source
- The Journal of Economic History
- Volume
- 86
- Issue
- 1
- Pages
- 258–286
- Publication date
- 16 January 2026
- Language
- EN