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A Monthly Stock Exchange Index for Ireland, 1864-1930

Author

Listed:
  • Richard S. Grossman

    (Dept of Economics, Wesleyan University&Institute for Quantitiative Social Science, Harvard University)

  • Ronan C. Lyons

    () (Trinity College, Dublin & Balliol College, Oxford)

  • Kevin Hjortshoj O'Rourke

    (All Souls College, Oxford, CEPR & NBER & IIIS, Trinity College Dublin)

  • Madalina A. Ursu

    (London School of Economics, UK)

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 marker index covering all 118 equity securities issued by 94 companies, sector-specific indices are present for railways, financial services, companies, and miscellaneous industrial and retail companies. Weighted for market capitalization, nominal equity prices were largely static in the 1860s, before increasing by almost 60% in normal 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 spectacular 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 then during the preceding two decades. The period from 1914 and 1929 saw a number of boom-bust cycles, concurrent with the 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 bellow levels associated with an equity premium puzzle.

Suggested Citation

  • Richard S. Grossman & Ronan C. Lyons & Kevin Hjortshoj O'Rourke & Madalina A. Ursu, 2013. "A Monthly Stock Exchange Index for Ireland, 1864-1930," Oxford University Economic and Social History Series _120, Economics Group, Nuffield College, University of Oxford.
  • Handle: RePEc:nuf:esohwp:_120
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    Cited by:

    1. Andersson, Fredrik N. G. & Lennard, Jason, 2016. "Irish GDP between the Famine and the First World War: Estimates Based on a Dynamic Factor Model," Working Papers 2016:13, Lund University, Department of Economics, revised 16 Jan 2018.
    2. Foley-Fisher, Nathan & McLaughlin, Eoin, 2016. "Sovereign debt guarantees and default: Lessons from the UK and Ireland, 1920–1938," European Economic Review, Elsevier, vol. 87(C), pages 272-286.
    3. Hannah, Leslie, 2017. "The London Stock Exchange 1869-1929: new bloody statistics for old?," Economic History Working Papers 82404, London School of Economics and Political Science, Department of Economic History.
    4. McLaughlin, Eoin & Foley-Fisher, Nathan, 2013. "Irish Land Bonds: 1891-1938," SIRE Discussion Papers 2013-109, Scottish Institute for Research in Economics (SIRE).
    5. Nathan Foley-Fisher & Eoin McLaughlin, 2014. "State dissolution, sovereign debt and default:Lessons from the UK and Ireland, 1920-1938," Working Papers 0061, European Historical Economics Society (EHES).

    More about this item

    Keywords

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

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
    • N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-

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