<P> Peter Temin , explains a tariff is an expansionary policy ( favourable to economic growth ) , like a devaluation as it diverts demand from foreign to home producers . He notes that exports were 7 percent of GNP in 1929 , they fell by 1.5 percent of 1929 GNP in the next two years and the fall was offset by the increase in domestic demand from tariff . He concludes that contrary the popular argument , contractionary effect of the tariff was small . ( Temin , P. 1989 . Lessons from the Great Depression , MIT Press , Cambridge , Mass ) </P>
<P> Peter Temin , explains a tariff is an expansionary policy ( favourable to economic growth ) , like a devaluation as it diverts demand from foreign to home producers . He notes that exports were 7 percent of GNP in 1929 , they fell by 1.5 percent of 1929 GNP in the next two years and the fall was offset by the increase in domestic demand from tariff . He concludes that contrary the popular argument , contractionary effect of the tariff was small . ( Temin , P. 1989 . Lessons from the Great Depression , MIT Press , Cambridge , Mass ) </P>
how much did the gnp drop from 1929 to 1932
how much did the gnp drop from 1929 to 1932
1.5 percent
1.5 percent