How Government Bond Prices Reflect Wartime Events - The Case of the Stockholm Market
AbstractHow are political events reflected in financial asset prices? Break points in sovereign debt prices are analyzed for Denmark, Norway, Finland, Sweden, Germany and Belgium during 1930-1948, using unique data from the Stockholm Stock Exchange. Unlike in countries involved in WWII, this market was unregulated. The outbreak of World War II heavily depressed prices of government bonds. Countries which were occupied (Belgium, Denmark and Norway) or under attack (Finland) saw their debt depreciate substantially. The battle of Stalingrad turns out indeed to be a turning-point of the war. This approach represents a complementary quantitative method to analyze the impact of political events.
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Bibliographic InfoPaper provided by Institute for Empirical Research in Economics - University of Zurich in its series IEW - Working Papers with number 102.
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Financial Markets; Economic History; WWII; Europe; Cliometrics;
Other versions of this item:
- Waldenström, Daniel & Frey, Bruno S., 2002. "How Government Bond Prices Reflect Wartime Events. The Case of the Stockholm Market," Working Paper Series in Economics and Finance 489, Stockholm School of Economics.
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
- N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-
- N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-
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