Working Paper: NBER ID: w18814
Authors: Christopher M. Meissner
Abstract: The classical gold standard period, 1880-1913, witnessed deep economic integration. High capital imports were related to better growth performance but may also have created greater volatility via financial crises. I first document the substantial output losses from various types of crises. I then explore the relationship between crises and two forces highlighted in the recent literature on financial crises: international capital movements and credit growth. Neither factor is sufficient to explain financial crises in this period. Instead, interactions between the informational environment, the fiscal situation, the exchange rate regime, and events beyond a nation's borders all help explain crises. Some examples are provided.
Keywords: capital flows; credit booms; financial crises; gold standard
JEL Codes: E5; E65; G01; N10; N20
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| capital inflows (F21) | financial crises (G01) |
| credit growth (E51) | financial crises (G01) |
| financial crises (G01) | output losses (D57) |
| capital inflows (F21) | volatility in growth rates (O49) |
| credit growth (E51) | volatility in growth rates (O49) |
| informational environment + fiscal situations + external events (G14) | financial crises (G01) |