Pub Date : 2020-11-05DOI: 10.1017/S0968565020000177
K. Yago
This article offers a Japanese perspective on the debate about the international financial system immediately after the first oil shock of 1973–4. Using archival records from the OECD and Bank of Japan, I analyze the three key policy issues discussed at the meetings of Working Party 3 (WP3) of the OECD: petrodollar recycling, balance-of-payments adjustments, and the management of global growth. Documents show that the Japanese approach to capital controls, exchange rate management, state-led growth orientation and international banking strategies was rather strengthened by the impact of the oil shock. By 1975 the OECD viewed Japan, together with Germany and the United States, as one of the ‘locomotives’ that would trigger a revival of economic growth in the industrialized West.
{"title":"Before the ‘locomotive’ runs: the impact of the 1973–1974 oil shock on Japan and the international financial system","authors":"K. Yago","doi":"10.1017/S0968565020000177","DOIUrl":"https://doi.org/10.1017/S0968565020000177","url":null,"abstract":"This article offers a Japanese perspective on the debate about the international financial system immediately after the first oil shock of 1973–4. Using archival records from the OECD and Bank of Japan, I analyze the three key policy issues discussed at the meetings of Working Party 3 (WP3) of the OECD: petrodollar recycling, balance-of-payments adjustments, and the management of global growth. Documents show that the Japanese approach to capital controls, exchange rate management, state-led growth orientation and international banking strategies was rather strengthened by the impact of the oil shock. By 1975 the OECD viewed Japan, together with Germany and the United States, as one of the ‘locomotives’ that would trigger a revival of economic growth in the industrialized West.","PeriodicalId":44063,"journal":{"name":"Financial History Review","volume":"27 1","pages":"418 - 435"},"PeriodicalIF":0.7,"publicationDate":"2020-11-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1017/S0968565020000177","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44973794","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-05DOI: 10.1017/S0968565020000141
H. James
This article examines the geo-economic consequences of the financial panic of October 1907. The vulnerability of the United States, but also of Germany, contrasted with the absence of a crisis in Great Britain. The experience showed the fast-growing industrial powers the desirability of mobilizing financial power, and the article examines the contributions of two influential brothers, Max and Paul Warburg, on different sides of the Atlantic. The discussion led to the establishment of a central bank in the United States and institutional improvements in German central banking: in both cases security as well as economic considerations played a substantial role.
{"title":"Networks and financial war: the brothers Warburg in the first age of globalization","authors":"H. James","doi":"10.1017/S0968565020000141","DOIUrl":"https://doi.org/10.1017/S0968565020000141","url":null,"abstract":"This article examines the geo-economic consequences of the financial panic of October 1907. The vulnerability of the United States, but also of Germany, contrasted with the absence of a crisis in Great Britain. The experience showed the fast-growing industrial powers the desirability of mobilizing financial power, and the article examines the contributions of two influential brothers, Max and Paul Warburg, on different sides of the Atlantic. The discussion led to the establishment of a central bank in the United States and institutional improvements in German central banking: in both cases security as well as economic considerations played a substantial role.","PeriodicalId":44063,"journal":{"name":"Financial History Review","volume":"27 1","pages":"303 - 318"},"PeriodicalIF":0.7,"publicationDate":"2020-11-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1017/S0968565020000141","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41396985","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-03DOI: 10.1017/S0968565020000165
R. Sylla
A century ago the US commercial banking system was exceptional in two ways. It was by good measure the largest commercial banking system of any country. And it was different from the commercial banking systems of other leading countries in having tens of thousands of independent banks with very few branches rather than the more typical pattern of a far smaller number of banks with many branches. Today, a century later, the US system is more normal than exceptional, dominated by a small number of very large banks with extensive branch systems. This article describes the US banking-structure transition from exceptional to normal. It closes with an interesting contrast of US and European banking developments.
{"title":"From exceptional to normal: changes in the structure of US banking since 1920","authors":"R. Sylla","doi":"10.1017/S0968565020000165","DOIUrl":"https://doi.org/10.1017/S0968565020000165","url":null,"abstract":"A century ago the US commercial banking system was exceptional in two ways. It was by good measure the largest commercial banking system of any country. And it was different from the commercial banking systems of other leading countries in having tens of thousands of independent banks with very few branches rather than the more typical pattern of a far smaller number of banks with many branches. Today, a century later, the US system is more normal than exceptional, dominated by a small number of very large banks with extensive branch systems. This article describes the US banking-structure transition from exceptional to normal. It closes with an interesting contrast of US and European banking developments.","PeriodicalId":44063,"journal":{"name":"Financial History Review","volume":"27 1","pages":"361 - 375"},"PeriodicalIF":0.7,"publicationDate":"2020-11-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1017/S0968565020000165","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46220872","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-09-10DOI: 10.1017/S0968565020000104
Kristian Rydqvist, R. Guo
We estimate historical stock returns for Swedish listed companies in a newly constructed data set of daily stock prices that spans more than 100 years. Stock returns exhibit all the familiar characteristics. The growth of the public sector depressed the stock market, and the process of globalization revitalized it. Banks played an important role in the early development of the stock market. There was little trading in the past, and we examine the effects on return measurement from missing data. Stock selection and the replacement of missing transaction prices through search back procedures or limit orders make little difference to a value-weighted stock price index, while ignoring the price effects of capital operations makes a big difference.
{"title":"Performance and development of a thin stock market: the Stockholm Stock Exchange 1912–2017","authors":"Kristian Rydqvist, R. Guo","doi":"10.1017/S0968565020000104","DOIUrl":"https://doi.org/10.1017/S0968565020000104","url":null,"abstract":"We estimate historical stock returns for Swedish listed companies in a newly constructed data set of daily stock prices that spans more than 100 years. Stock returns exhibit all the familiar characteristics. The growth of the public sector depressed the stock market, and the process of globalization revitalized it. Banks played an important role in the early development of the stock market. There was little trading in the past, and we examine the effects on return measurement from missing data. Stock selection and the replacement of missing transaction prices through search back procedures or limit orders make little difference to a value-weighted stock price index, while ignoring the price effects of capital operations makes a big difference.","PeriodicalId":44063,"journal":{"name":"Financial History Review","volume":"28 1","pages":"26 - 44"},"PeriodicalIF":0.7,"publicationDate":"2020-09-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1017/S0968565020000104","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47834859","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-08-01DOI: 10.1017/s0968565020000128
{"title":"FHR volume 27 issue 2 Cover and Back matter","authors":"","doi":"10.1017/s0968565020000128","DOIUrl":"https://doi.org/10.1017/s0968565020000128","url":null,"abstract":"","PeriodicalId":44063,"journal":{"name":"Financial History Review","volume":" ","pages":"b1 - b2"},"PeriodicalIF":0.7,"publicationDate":"2020-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1017/s0968565020000128","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47038657","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-08-01DOI: 10.1017/S0968565020000098
H. James
The article considers crises of globalization: the 1840s, the 1870s, the Great War, the Great Depression, the Great Inflation (1970s), the Global Financial Crisis (2008) and the Great Lockdown (2020). Each led to a reshaping of the institutions that supervised or regulated economic development globally but also nationally. In each case, a series of questions are answered: what were the origins of the crisis, what were the monetary and fiscal policy responses, how did the crisis affect the drivers of globalization, trade, migration and capital flows? And how did these different challenges affect governance and views of politics? The article concludes that supply shocks are most easily dealt with by inflationary mechanisms, allowing groups to gain some apparent compensation for their losses through the supply shock. But the resulting mobilization into groups also strains social cohesion.
{"title":"Seven transformative crises from European revolution to corona: globalization and state capacity","authors":"H. James","doi":"10.1017/S0968565020000098","DOIUrl":"https://doi.org/10.1017/S0968565020000098","url":null,"abstract":"The article considers crises of globalization: the 1840s, the 1870s, the Great War, the Great Depression, the Great Inflation (1970s), the Global Financial Crisis (2008) and the Great Lockdown (2020). Each led to a reshaping of the institutions that supervised or regulated economic development globally but also nationally. In each case, a series of questions are answered: what were the origins of the crisis, what were the monetary and fiscal policy responses, how did the crisis affect the drivers of globalization, trade, migration and capital flows? And how did these different challenges affect governance and views of politics? The article concludes that supply shocks are most easily dealt with by inflationary mechanisms, allowing groups to gain some apparent compensation for their losses through the supply shock. But the resulting mobilization into groups also strains social cohesion.","PeriodicalId":44063,"journal":{"name":"Financial History Review","volume":"27 1","pages":"139 - 159"},"PeriodicalIF":0.7,"publicationDate":"2020-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1017/S0968565020000098","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42629616","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-08-01DOI: 10.1017/S0968565020000074
Sebastian Teupe
Recent contributions on ‘financial repression’ and ‘money illusion’ have referred to Maynard Keynes's How to Pay for the War as a supporting document. This article discusses whether Keynes prescribed policies of ‘financial repression’ that were implemented in the United Kingdom, and other countries, following World War II. It seems reasonable that Keynes's writings were instrumental in translating British monetary experiences of the 1920s and 1930s into expectations of policymakers during and after World War II, including a belief in ‘money illusion’ that suggested the use of inflation for driving down real interest rates of public bonds. If this was the case, How to Pay for the War could indeed provide an important explanation for the why and when of ‘financial repression’. This article argues that How to Pay for the War only partly provided support for a policy of ‘financial repression’, and none for using inflation as a ‘tax gatherer’ to the detriment of domestic savers in general. Crediting Keynes as a source for widespread ‘money illusion’ is also out of line with the historical record.
{"title":"Keynes, inflation and the public debt: How to Pay for the War as a policy prescription for financial repression?","authors":"Sebastian Teupe","doi":"10.1017/S0968565020000074","DOIUrl":"https://doi.org/10.1017/S0968565020000074","url":null,"abstract":"Recent contributions on ‘financial repression’ and ‘money illusion’ have referred to Maynard Keynes's How to Pay for the War as a supporting document. This article discusses whether Keynes prescribed policies of ‘financial repression’ that were implemented in the United Kingdom, and other countries, following World War II. It seems reasonable that Keynes's writings were instrumental in translating British monetary experiences of the 1920s and 1930s into expectations of policymakers during and after World War II, including a belief in ‘money illusion’ that suggested the use of inflation for driving down real interest rates of public bonds. If this was the case, How to Pay for the War could indeed provide an important explanation for the why and when of ‘financial repression’. This article argues that How to Pay for the War only partly provided support for a policy of ‘financial repression’, and none for using inflation as a ‘tax gatherer’ to the detriment of domestic savers in general. Crediting Keynes as a source for widespread ‘money illusion’ is also out of line with the historical record.","PeriodicalId":44063,"journal":{"name":"Financial History Review","volume":"27 1","pages":"187 - 209"},"PeriodicalIF":0.7,"publicationDate":"2020-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1017/S0968565020000074","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46254754","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-08-01DOI: 10.1017/s0968565020000086
Chantal S. Game, L. Cullen, Alistair M. Brown
This study explores parliamentary reforms related to the financial accountability of banks following the 1825–6 and 1836–7 financial crises in England. An appraisal of nineteenth-century parliamentary Hansard transcripts reveals early banking legislative pursuits. The study observes the laissez-faire and interventionist approaches towards the banking enactments of 1826, 1833 and 1844 that underpin the transformation of financial accountability during this era. The Bank Notes Act 1826 imposed financial accountability on the Bank of England by requiring the mandatory disclosure of notes issued. The Bank Notes Act 1833 extended this requirement to all other banks. The Bank Charter Act 1833 increased the financial accountability of the Bank of England by requiring it to provide an account of bullion and securities belonging to the governor and company, as well as deposits held by the bank. Thereafter, the Joint Stock Banks Act 1844 pioneered the regular publication of assets and liabilities and communication of the balance sheet and profit and loss account to shareholders. State intervention in the financial accountability of banks during the period from 1825 to 1845 appears to have been cumulative.
{"title":"The rise of financial accountability in British joint stock banks: 1825 to 1845","authors":"Chantal S. Game, L. Cullen, Alistair M. Brown","doi":"10.1017/s0968565020000086","DOIUrl":"https://doi.org/10.1017/s0968565020000086","url":null,"abstract":"This study explores parliamentary reforms related to the financial accountability of banks following the 1825–6 and 1836–7 financial crises in England. An appraisal of nineteenth-century parliamentary Hansard transcripts reveals early banking legislative pursuits. The study observes the laissez-faire and interventionist approaches towards the banking enactments of 1826, 1833 and 1844 that underpin the transformation of financial accountability during this era. The Bank Notes Act 1826 imposed financial accountability on the Bank of England by requiring the mandatory disclosure of notes issued. The Bank Notes Act 1833 extended this requirement to all other banks. The Bank Charter Act 1833 increased the financial accountability of the Bank of England by requiring it to provide an account of bullion and securities belonging to the governor and company, as well as deposits held by the bank. Thereafter, the Joint Stock Banks Act 1844 pioneered the regular publication of assets and liabilities and communication of the balance sheet and profit and loss account to shareholders. State intervention in the financial accountability of banks during the period from 1825 to 1845 appears to have been cumulative.","PeriodicalId":44063,"journal":{"name":"Financial History Review","volume":"27 1","pages":"234 - 255"},"PeriodicalIF":0.7,"publicationDate":"2020-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1017/s0968565020000086","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48908746","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-08-01DOI: 10.1017/s0968565020000116
{"title":"FHR volume 27 issue 2 Cover and Front matter","authors":"","doi":"10.1017/s0968565020000116","DOIUrl":"https://doi.org/10.1017/s0968565020000116","url":null,"abstract":"","PeriodicalId":44063,"journal":{"name":"Financial History Review","volume":" ","pages":"f1 - f2"},"PeriodicalIF":0.7,"publicationDate":"2020-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1017/s0968565020000116","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45798090","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-07-09DOI: 10.1017/S0968565020000062
Elena Seghezza, Pierluigi Morelli
Since the publication of Cagan's seminal contribution in 1956 and its further development by Sargent (1982) there has been a growing literature that seeks to explain German hyperinflation in terms of the monetary hypothesis. However, this article shows that the origins of this hyperinflation can be traced back to a sudden stop that occurred in the summer of 1922 at a time when expectations that the German economy would stabilise began to subside. The reversal of capital flows that took place in those months led in the short term to a dramatic depreciation of the mark, a significant increase in prices and a decline in output. This decline sparked bitter social conflict that fuelled a wage and price spiral. This spiral was accommodated by monetary authorities, leading in turn to explosive inflation.
{"title":"Was a sudden stop at the origin of German hyperinflation?","authors":"Elena Seghezza, Pierluigi Morelli","doi":"10.1017/S0968565020000062","DOIUrl":"https://doi.org/10.1017/S0968565020000062","url":null,"abstract":"Since the publication of Cagan's seminal contribution in 1956 and its further development by Sargent (1982) there has been a growing literature that seeks to explain German hyperinflation in terms of the monetary hypothesis. However, this article shows that the origins of this hyperinflation can be traced back to a sudden stop that occurred in the summer of 1922 at a time when expectations that the German economy would stabilise began to subside. The reversal of capital flows that took place in those months led in the short term to a dramatic depreciation of the mark, a significant increase in prices and a decline in output. This decline sparked bitter social conflict that fuelled a wage and price spiral. This spiral was accommodated by monetary authorities, leading in turn to explosive inflation.","PeriodicalId":44063,"journal":{"name":"Financial History Review","volume":"27 1","pages":"161 - 186"},"PeriodicalIF":0.7,"publicationDate":"2020-07-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1017/S0968565020000062","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45260968","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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