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Currency versus banking in the financial crisis of 1931

Ritschl, Albrecht and Sarferaz, Samad (2014) Currency versus banking in the financial crisis of 1931. International Economic Review, 55 (2). 349 - 373. ISSN 0020-6598

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Identification Number: 10.1111/iere.12052


During the 1920s, Germany was the world's largest capital importer, financing reparations through U.S. credits. We examine financial channels in crisis transmission between these two countries around the German financial crisis of 1931. We specify a structural dynamic factor model to identify financial and monetary factors separately for each of the two economies. We find substantial crisis transmission from Germany to the United States via the financial channel, while monetary or financial crisis transmission from the United States to Germany was weak. We also find major real effects of the 1931 crisis on both economies, again transmitted via the financial channel

Item Type: Article
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Additional Information: © 2014 The Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association
Divisions: Economic History
Centre for Economic Performance
Subjects: H Social Sciences > HG Finance
JEL classification: G - Financial Economics > G0 - General
Date Deposited: 13 May 2014 14:38
Last Modified: 20 Oct 2021 02:10
Funders: European Science Foundation via the Globalizing Europe Economic History Network and the Marie Curie Research Training Networks

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