Using data on New Deal grants to each U.S. county from 1993 to 1939, we estimate how relief and public works spending and payments to farmers through the Agricultural Adjustment Administration influenced retail consumption. On a per capita basis, we find that an additional dollar of public works and relief spending was associated with a 44 cent increase in 1939 retail sales. In contrast, the AAA seems to have had a negative effect on retail sales, suggesting that nonlandowners in the farm sector suffered disproportionate declines in income as a result of the AAA.
ASJC Scopus subject areas
- Economics and Econometrics
- Economics, Econometrics and Finance (miscellaneous)