Journal ArticleDOI
Wars, Inflation and Stock Market Returns in France, 1870-1945
TLDR
In this article, a comparative study of the effects of three wars on the French stock market is presented, showing that stock price behavior is influenced by the specific way each war is financed.Abstract:
This paper undertakes a comparative study of the effects of three wars upon the French stock market. Periods of war are highly turbulent financial times and trigger multiple factors to act upon stock prices. The paper presents evidence suggesting that stock price behaviour is influenced by the specific way each war is financed. Financed solely by regular long-term debt, the Franco-Prussian war exhibited stock prices that only reflected real activity. On the other hand, both World Wars were partially financed by monetary creation but differed to the extent of financial repression. In the case of World War II, monetary creation within a closed repressed economy led to a paradoxical, short-lived increase in stock prices. The paper also examines how war affected the characteristics of the market. The Franco-Prussian war caused a durable high interest rate; World War I smoothed out most of the public services firms and increased volatility; whilst World War II affected the components of the stock market. Overall, due to market values being destroyed due to the World Wars, the importance of the stock market in the economy decreased.read more
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ReportDOI
The Rate of Return on Everything, 1870–2015
TL;DR: In this paper, the aggregate real rate of return in the economy was analyzed for all major asset classes, including housing, and the annual data on total returns for equity, housing, bonds, and bills cover 16 advanced economies from 1870 to 2015.
Journal ArticleDOI
Art as a Wartime Investment: Conspicuous Consumption and Discretion
TL;DR: This article showed that the art market in occupied France during WWII significantly outperformed all alternative investments (bonds, equities, as well as currencies exchanged on the black market) other than gold.
Posted Content
The Big Bang: Stock Market Capitalization in the Long Run
TL;DR: In this article, the authors present annual stock market capitalization data for 17 advanced economies from 1870 to today and reveal a striking new time series pattern: over the long run, the evolution of stock market size resembles a hockey stick.
ReportDOI
Testing asset pricing theory on six hundred years of stock returns: prices and dividends for the bazacle company from 1372 to 1946
TL;DR: In this article, the authors test asset pricing theory using the Bazacle company of Toulouse, the earliest documented shareholding corporation, and find a real average dividend yield of 5% per annum and no long-term price growth.
Journal ArticleDOI
Naval disasters, World War Two and the British stock market
TL;DR: This paper examined the impact of naval disasters on the British stock market and found that the market was generally not affected by other individual disasters or successes, no matter how emotive those disasters were.
References
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Journal ArticleDOI
The Great Reversals: The Politics of Financial Development in the 20th Century
Raghuram G. Rajan,Raghuram G. Rajan,Raghuram G. Rajan,Luigi Zingales,Luigi Zingales,Luigi Zingales +5 more
TL;DR: In this paper, the authors propose an interest group theory of financial development where incumbents oppose financial development because it breeds competition, and the theory predicts that incumbents' opposition will be weaker when an economy allows both cross-border trade and capital flows.
Journal ArticleDOI
Rare Disasters and Asset Markets in the Twentieth Century
TL;DR: In this article, the authors calibrate disaster probabilities from the twentieth century global history, especially the sharp contractions associated with World War I, the Great Depression, and World War II.
Book
Age of extremes :the short twentieth century 1914-1991
TL;DR: In this article, the authors describe the age of catastrophe: total wars, world revolution into the economic abyss, the fall of liberalism against the common enemy, the arts 1914-45, the end of empires.
Journal ArticleDOI
The Fiscal and Monetary Linkage between Stock Returns and Inflation
Robert Geske,Richard Roll +1 more
TL;DR: The authors argue that stock returns are negatively related to contemporaneous changes in expected inflation because they signal a chain of events which results in a higher rate of monetary expansion and that this puzzling empirical phenomenon does not indicate causality.