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Recovery from Financial Crises in Peripheral Economies, 1870-1913

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  • Peter H. Bent

Abstract

What drives recoveries after financial crises? I address this question for the 1870-1913 “first era of globalization,” a period when international economic integration meant that terms of trade movements could have significant national-level impacts, but before governments were engaged in widespread economic management. Protectionism was one of the few economic policy options available at this time. The impacts of these two factors–terms of trade and tariff rates–over this period have been studied before. But previous studies have not looked specifically at how these factors influenced recoveries from financial crises. I find that tariff shocks had a positive impact on GDP in post-crisis periods, while terms of trade shocks had a slightly negative impact. The tariff results are especially pronounced in temperate economies. Overall this suggests that national governments, through trade policies, played a more significant role in shaping economic outcomes during this period than is typically recognized.

Suggested Citation

  • Peter H. Bent, 2018. "Recovery from Financial Crises in Peripheral Economies, 1870-1913," CEH Discussion Papers 07, Centre for Economic History, Research School of Economics, Australian National University.
  • Handle: RePEc:auu:hpaper:068
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    File URL: https://www.cbe.anu.edu.au/researchpapers/ceh/WP201807.pdf
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