Economists digitized Depression-era data to explain why South Dakota collapsed while Maryland barely slowed

Historians have known the Great Depression hit different states in wildly different ways — South Dakota's income fell 48 percent while Maryland's fell 15 percent — but nobody knew why. Economists just built a model that reconstructs what actually happened in each state's farms, mines, and factories, revealing the Depression wasn't one shock hitting everywhere equally, but dozens of sector-specific shocks hitting agricultural states hardest.

For 90 years, economists told two stories about the Depression: either it was a monetary collapse that hit everywhere the same way, or it was an agricultural crisis. This paper shows both stories missed the real geography. Agricultural states got hammered not because farming crashed everywhere equally, but because different sectors collapsed at different speeds in different places — and the choice of how you measure those prices matters enormously for which story you believe. That means any economic theory that treats the Depression as a single national event is probably missing the actual mechanism of how it happened.