The Mother of All Sudden Stops: Capital Flows and Reversals in Europe, 1919-32

Olivier Accominotti, Barry Eichengreen

NBER Working Paper No. 19580
Issued in October 2013
NBER Program(s):   DAE   IFM

We present new data documenting European capital issues in major financial centers from 1919 to 1932. Push factors (conditions in international capital markets) perform better than pull factors (conditions in the borrowing countries) in explaining the surge and reversal in capital flows. In particular, the sharp increase in stock market volatility in the major financial centers at the end of the 1920s figured importantly in the decline in foreign lending. We draw parallels with Europe today.

Acknowledgments

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Document Object Identifier (DOI): 10.3386/w19580

Published: Olivier Accominotti & Barry Eichengreen, 2016. "The mother of all sudden stops: capital flows and reversals in Europe, 1919-32," The Economic History Review, vol 69(2), pages 469-492. citation courtesy of

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