Exchange Rates and Casualties During the First World War
AbstractI estimate a single factor model of Swiss exchange rates during World War I for five of the primary belligerents: Britain, France, Italy, Germany, and Austria-Hungary. At the outbreak of the war these nations suspended convertibility of their currencies into gold with the promise that after the war each would restore convertibility at the old par. However, once convertibility was suspended, each currency became a state-contingent claim; after the war it would pay off at (or near) the old par if the country won or pay off significantly less than par (perhaps nothing) if the country lost. The single factor extracted from the five exchange rates appears to contain information on contemporaries' expectations about the war's outcome. Innovations to the single factor are correlated with time series on soldiers killed and wounded and soldiers taken prisoner.
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Bibliographic InfoPaper provided by Cowles Foundation for Research in Economics, Yale University in its series Cowles Foundation Discussion Papers with number 1321.
Length: 37 pages
Date of creation: Aug 2001
Date of revision:
Publication status: Published in Journal of Monetary Economics (November 2004), 51(8): 1711-1742
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Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA
Other versions of this item:
- Hall, George J., 2004. "Exchange rates and casualties during the first world war," Journal of Monetary Economics, Elsevier, vol. 51(8), pages 1711-1742, November.
- George J. Hall, 2002. "Exchange Rates and Casualties During the First World War," NBER Working Papers 9261, National Bureau of Economic Research, Inc.
- E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
- N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
- N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-
- F31 - International Economics - - International Finance - - - Foreign Exchange
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-11-27 (All new papers)
- NEP-CBA-2001-11-27 (Central Banking)
- NEP-ENT-2001-11-27 (Entrepreneurship)
- NEP-IFN-2001-11-27 (International Finance)
- NEP-NET-2001-11-27 (Network Economics)
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