Investigating on the reasons of British overseas investments (1850-1913) we analyze two different approaches on data concluding that they are not different from a stochastic view. Inquiring on ‘push’ approach, we find that exists negative correlation between GDP and overseas investments where the former cause the latter. Link between monetary events and colonialism highlights India’s role as a reserve of bullions. In this way, British capital was able to complete its natural cycle draining money for future foreign investments. This improves the theory by introducing the monetary element in ‘push’ and ‘pull’ hypothesis as well.
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Paper provided by Sapienza University of Rome, Department of Public Economics in its series Working Papers with number
106.
Find related papers by JEL classification: N10 - Economic History - - Macroeconomics and Monetary Economics; Growth and Fluctuations - - - General, International, or Comparative N13 - Economic History - - Macroeconomics and Monetary Economics; Growth and Fluctuations - - - Europe: Pre-1913 E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System