Ability and Willingness to Pay in the Age of Pax Britannica, 1890–1914

Kelly, Trish

doi:10.1006/exeh.1997.0685

Cited by 33 publications

(9 citation statements)

References 10 publications

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“…We have seen earlier that sudden stops bunched around the early to mid-1870s, the early 1890s, and 1906-1907. As is well known from the late nineteenth century and early twentieth century economic historiography, all these subperiods were characterized by financial crises and a higher incidence of sovereign defaults (Kindleberger 1978;Lindert and Morton 1989;Kelly 1998;Eichengreen 2003). While in principle these SSs could have been triggered by countryspecific factors in capital importers (such as the U.S. railways bankruptcies of 1873 or Argentina's mortgage bond repayment crisis of early 1890), which then irradiated to other emerging markets, possibly via mechanisms highlighted in the international financial contagion literature (Eichengreen, Rose, and Wyzploz 1996), the evidence provided in this paper points to one common factor in all these events-preceding hikes in central bank discount rates in the core capital exporting countries, typically with a oneto two-year lag.…”

Section: Resultsmentioning

confidence: 99%

Sudden Stops and Currency Drops: A Historical Look

Catão

2006

IMF Working Papers

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This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper shows that recent manifestations of sudden stops (SSs) in international capital flows have striking parallels in the early financial globalization era preceding World War I. All main capital-importing countries then faced episodic capital flow reversals averaging some 5 percent of GDP and with a median duration of four years. Most SSs also displayed striking crosscountry synchronization, being immediately preceded by rising world interest rates. Both fixed and floating exchange rate regimes were hit, with no significant differences between them. Yet, not all SSs resulted in currency drops: while some countries experienced currency collapses, others managed to preserve exchange rate stability. These different responses are related to domestic "frictions" that heightened the procyclicality of absorption and hindered precautionary reserve accumulation in some countries relative to others.

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Section: Resultsmentioning

confidence: 99%

Sudden Stops and Currency Drops: A Historical Look

Catão

2006

IMF Working Papers

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“…In this paper, we consequently abstain from making direct assumptions, property rights protection in the average developing country is only about half as effective as in the OECD countries (IPRI, 2007;Heritage Foundation, 2006;Dollar, 2002). As for the other parts of the developing world that were not under formal colonial rule before WW1 such as Latin America and Eastern Europe, the recent literature argues that the European powers and the US policed and protected property rights by way of an informal imperialism (Kelly, 1998;Goetzmann and Ukhov, 2001). In particular Mitchener and Weidenmier (2005a,b) show that military pressure and political control were an important and commonly used enforcement mechanism for international debt transactions in 1870-1913.…”

Section: An Extended Lucas Exercisementioning

confidence: 99%

The Lucas Paradox and the Quality of Institutions: Then and Now

Schularick

Steger

2008

SSRN Journal

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In the first era of financial globalization (1880-1914), global capital market integration led to substantial net capital movements from rich to poor economies. The historical experience stands in contrast to the contemporary globalization where gross capital mobility is equally high, but did not incite a substantial transfer of savings from rich to poor economies. Using data for the historical and modern periods we extend Lucas' (1990) original model and show that differences in institutional quality between rich and poor countries can account for the sharply divergent patterns of international capital movements.

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“…Source: The external debt service to exports ratios are calculated from data provided by Kelly (1998). Data on government revenues are from the Annual Reports of the Corporation of Foreign Bondholders.…”

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confidence: 99%

Empire, Public Goods, and the Roosevelt Corollary

Mitchener¹,

Weidenmier²

2005

JEH

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We thank Hugh Rockoff, Noel Maurer, two anonymous referees and seminar participants at UC Berkeley, the NBER-DAE conference, and the EHA Annual Meetings for comments and suggestions. We also thank Lea Halloway for valuable research assistance, Trish Kelly for sharing data, and the Lowe Institute, Leavey Foundation, Dean Witter Foundation, and the Finocchio Fund for financial support. The views expressed herein are those of the authors and not necessarily those of the National Bureau of Economic Research. The views expressed herein are those of the author(s) and not necessarily those of the National Bureau of Economic Research.

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Ability and Willingness to Pay in the Age of Pax Britannica, 1890–1914

Cited by 33 publications

References 10 publications

Sudden Stops and Currency Drops: A Historical Look

Sudden Stops and Currency Drops: A Historical Look

The Lucas Paradox and the Quality of Institutions: Then and Now

Empire, Public Goods, and the Roosevelt Corollary

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