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A monthly stock exchange index for Ireland, 1864-1930

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  • Kevin Hjortshøj O'Rourke
  • Richard S. Grossman
  • Madalina A. Ursu
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    Abstract

    Information on the performance of equities during the latter part of the globalized long nineteenth century is scarce, particularly for smaller European economies such as Ireland.� Using a dataset of over 35,000 price-year observations from the Investor's Monthly Manual, this paper constructs new monthly Irish stock market price indices for the period 1864-1930, encompassing periods of significant economic and political turmoil in Irish history.� In addition to a total market index covering all 118 equity securities issued by 94 companies, sector-specific indices are presented for railways, financial services companies, and miscellaneous industrial and retail companies.� Weighted by market capitalization, nominal equity prices were largely static in the 1860s, before increasing by almost 60% in nominal terms between 1870 and 1878.� Between 1878 and 1879, equity prices fell by one sixth in the space of a year, after which there was a secular rise in equity prices for two decades, with equity prices in 1899 twice what they had been in 1864.� Between the turn of the century and the outbreak of the Great War, though, prices fell by 25%, a pattern that stands in stark contrast to returns on the London exchange, which were greater during 1894-1913 than during the preceding two decades.� The period from 1914 until 1929 saw a number of boom-bust cycles, concurrent with war and other political events affecting Ireland, including its independence movement.� Railway equities, which had trebled between the mid-1860s and the turn of the century, fell sharply during the 1910s and 1920s.� In contrast, financial equity prices - which were just 20% higher in 1920 than in 1864 - rose strongly during the 1920s.� Overall, the average annual gain in equity prices over the period was just 0.9%, well below levels associated with an equity premium puzzle.

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    Bibliographic Info

    Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 120.

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    Date of creation: 08 Oct 2013
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    Handle: RePEc:oxf:wpaper:120

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    Keywords: Irish stock exchange; Investor's Monthly Manual; long-run stock returns; 19th Century; 20th Century; Ireland;

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    1. Giavazzi, Francesco & Jappelli, Tullio & Pagano, Marco, 2000. "Searching for Non-Linear Effects of Fiscal Policy: Evidence from Industrial and Developing Countries," CEPR Discussion Papers 2374, C.E.P.R. Discussion Papers.
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    Cited by:
    1. Keith Blackburn & Kyriakos C. Neanidis & M. Emranul Haque, 2008. "Corruption, Seigniorage and Growth: Theory and Evidence," CESifo Working Paper Series 2354, CESifo Group Munich.
    2. Gray, Jo Anna & Stone, Joe A., 2012. "Debt and nonlinear fiscal policy: evidence from the states," MPRA Paper 39731, University Library of Munich, Germany.
    3. Ali Abbas, S.M. & Bouhga-Hagbe, Jacques & Fatás, Antonio & Mauro, Paolo & Velloso, Ricardo C., 2010. "Fiscal Policy and the Current Account," CEPR Discussion Papers 7859, C.E.P.R. Discussion Papers.
    4. Richard Kneller & Florian Misch, 2014. "The Effects Of Public Spending Composition On Firm Productivity," Economic Inquiry, Western Economic Association International, vol. 52(4), pages 1525-1542, October.
    5. Justin Yifu Lin & Doerte Doemeland, 2012. "Beyond Keynesianism: Global Infrastructure Investments In Times Of Crisis," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 3(03), pages 1250015-1-1.
    6. Giovanni Andrea Cornia, 2012. "The New Structuralist Macroeconomics and Income Inequality," Working Papers - Economics wp2012_25.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    7. Ribeiro, Thiago & Pereira, Luiz Carlos Bresser, 2009. "Os efeitos da poupança pública sobre o crescimento econômico:," Textos para discussão 171, Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).
    8. Hans Genberg, 2005. "The macroeconomic effects of adjustment lending: A review and evaluation," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 8(1), pages 1-40.

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