Still tied by golden fetters: the global response to the US recession of 1937–1938

Urban, Scott; Straumann, Tobias

doi:10.1017/s0968565011000308

Cited by 5 publications

(8 citation statements)

References 23 publications

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“…These were caught between a decline in international prices for their agricultural exports and a fixed nominal cost of servicing their international debts, resulting in the first international defaults of the Great Depression. Argentina, Australia, Brazil and Nigeria all left the gold standard before 1930 (Urban and Straumann, , p. 44). Additional pressure on European balances of payment emerged on the financial account.…”

Section: Great Depression Chronologymentioning

confidence: 99%

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Policy Options for the Euro: Heterodoxy Ahead

Urban

2014

J of Common Market Studies

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This article compares the euro crisis to the Great Depression. The challenge in both is to depreciate the real exchange rate of crisis countries -regain 'competitiveness' -without depreciating the nominal exchange rate. The monetary arrangements in the Great Depression elicited zeal against nominal depreciation similar to that in the eurozone today. To anticipate the conclusion: recovery in the Great Depression depended upon nominal depreciation or imposition of currency controls. Similar heterodoxy is in store for the eurozone.

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Section: Great Depression Chronologymentioning

confidence: 99%

“…Many countries resumed a monetary system that was a gold standard at a devalued exchange rate (Nurkse, , p. 145), and most countries managed the exchange rate just as they had done in the gold standard, but at a newly depreciated level (Nurkse, , p. 211; Urban and Straumann, ).…”

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Policy Options for the Euro: Heterodoxy Ahead

Urban

2014

J of Common Market Studies

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“…With the return of the UK to the gold exchange standard exchange controls were eliminated (Bordo and Schwartz 1999). While, after the suppression of convertibility in 1931 the UK implemented few protectionist measures, these were weak, and imperial preference was maintained with Commonwealth countries (Urban and Straumann 2012). It was not until the onset of World War II (1939) that the second wave of capital controls emerged, and lasted for four decades.…”

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confidence: 99%

“…In this periodisation I follow the works of Bordo and Schwartz (1999), Obstfeld and Taylor (2004), Fatas et al (2009) and Urban and Straumann (2012).…”

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confidence: 99%

Stock market co-movement, domestic economic policy and the macroeconomic trilemma: the case of the UK (1922–2016)

Laverde

2019

Financial History Review

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This article explores the global cycle hypothesis by testing whether the US stock market serves as an explanatory variable for the evolution of expansions and contractions in the UK stock market from 1922 until 2016. Alternatively, it tests an index that groups the stock markets of advanced economies to identify whether this driving force is international. Second, regarding co-movement with the US, the article explores whether its time-varying nature is contingent on the domestic and international economic policy regimes. I find evidence that there is a strong and contemporaneous co-movement between the US and UK stock markets. Additionally, through a VAR model, I identify that the movements in the UK stock market cause, in the Granger sense, changes in the index for advanced economies up to two years later. Furthermore, in the short-run co-movement between the US and UK stock markets is contingent on the macroeconomic trilemma while, in the long run, both domestic and international policy regimes affect the relationship. A final contribution is the design of a new methodology for describing the evolution of financial time series as risk-adjusted above or below average returns to different time horizons: the Local Bull Bear Indicators (LBBIs).

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“… 12 This article does not consider the international dimensions of the US recession; on that, see Urban and Straumann (2012). …”

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confidence: 99%

Gold sterilization and the recession of 1937–1938

Irwin

2012

Financial History Review

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The recession of 1937–8 is often cited as illustrating the dangers of withdrawing fiscal and monetary stimulus too early in a weak recovery. Yet our understanding of this severe downturn is incomplete: existing studies find that changes in fiscal policy were small in comparison to the magnitude of the downturn and that higher reserve requirements were not binding on banks. This article focuses on a neglected change in monetary policy, the sterilization of gold inflows during 1937, and finds that it exerted a powerful contractionary force during this period. The transmission of this monetary shock to the real economy appears to have worked through lower asset (equity) prices and higher interest rates.

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Still tied by golden fetters: the global response to the US recession of 1937–1938

Cited by 5 publications

References 23 publications

Policy Options for the Euro: Heterodoxy Ahead

Policy Options for the Euro: Heterodoxy Ahead

Stock market co-movement, domestic economic policy and the macroeconomic trilemma: the case of the UK (1922–2016)

Gold sterilization and the recession of 1937–1938

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