Capital Flows, Credit Booms, and Financial Crises in the Classical Gold Standard Era

34 Pages Posted: 16 Feb 2013 Last revised: 30 May 2021

Date Written: February 2013

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.

Suggested Citation

Meissner, Christopher M., Capital Flows, Credit Booms, and Financial Crises in the Classical Gold Standard Era (February 2013). NBER Working Paper No. w18814, Available at SSRN: https://ssrn.com/abstract=2219072

Christopher M. Meissner (Contact Author)

University of California, Davis ( email )

One Shields Avenue
Apt 153
Davis, CA 95616
United States

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