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Capital Flows, Credit Booms, and Financial Crises in the Classical Gold Standard Era

  • Christopher M. Meissner

The classical gold standard period, 1880-1913, witnessed deep economic integration. High capital imports were related to better growth performance but may also have created greater volatility via financial crises. I first document the substantial output losses from various types of crises. I then explore the relationship between crises and two forces highlighted in the recent literature on financial crises: international capital movements and credit growth. Neither factor is sufficient to explain financial crises in this period. Instead, interactions between the informational environment, the fiscal situation, the exchange rate regime, and events beyond a nation's borders all help explain crises. Some examples are provided.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18814.

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Date of creation: Feb 2013
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Handle: RePEc:nbr:nberwo:18814
Note: DAE
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