TY  - JOUR
AU  - Brown,William O.
AU  - Burdekin,Richard C. K.
AU  - Weidenmier,Marc D.
TI  - Volatility in an Era of Reduced Uncertainty: Lessons from Pax Britannica
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11319
PY  - 2005
Y2  - May 2005
UR  - http://www.nber.org/papers/w11319
L1  - http://www.nber.org/papers/w11319.pdf
N1  - Author contact info:
William Brown
Department of Economics
Claremont McKenna College
Claremont, CA  91711
E-Mail: william.brown@claremontmckenna.edu

Richard Burdekin
Robert Day School of Economics and Finance
Claremont McKenna College
500 East Ninth Street
Claremont, CA 91711
E-Mail: richard.burdekin@claremontmckenna.edu

Marc D. Weidenmier
Robert Day School of Economics and Finance
Claremont McKenna College
500 East Ninth Street
Claremont, CA 91711
Tel: 909/607-8497
Fax: 909/621-8249
E-Mail: marc_weidenmier@claremontmckenna.edu
AB  - Although it has been well established that financial volatility is related to news and macroeconomic shocks, there has been less emphasis on the importance of underlying economic and political stability. In this paper we study the behavior of consol returns since 1729 and identify a greater-than-50% decline in volatility from the end of the Napoleonic wars in 1815 until the First World War. News events and macroeconomic variables cannot account for this extended period of reduced volatility. Underlying political stability under Pax Britannica seems to be a more likely explanation, however.
ER  -