Working Paper: NBER ID: w10108
Authors: Namsuk Kim; John Joseph Wallis
Abstract: In the 1830s the British and American economies were hit by a series of shared macroeconomic shocks. This paper investigates the role of markets for Americas State bonds in Britain and the U.S. during and between the crises in 1837, 1839, and 1842. There is strong evidence that the crises in 1839 and 1842 originated in the U.S. and spread to Britain. There is also strong evidence that credit markets for American state bonds were tighter in the U.S. than in London between 1839 and 1842.
Keywords: No keywords provided
JEL Codes: N0; N1; N2; N4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| U.S. financial conditions (N22) | British market responses (G10) |
| U.S. financial conditions (N22) | financial crises in 1839 and 1842 (G01) |
| tighter credit markets in U.S. (F65) | higher yields and lower prices for American state bonds (H74) |
| financial distress in U.S. (G33) | diminished willingness of British investors to lend to American state bonds (H74) |
| collapse of state credit (H74) | internal American financial dynamics (F30) |