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

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  • Olivier Accominotti
  • Barry Eichengreen

Abstract

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.

Suggested Citation

  • Olivier Accominotti & Barry Eichengreen, 2013. "The Mother of All Sudden Stops: Capital Flows and Reversals in Europe, 1919-32," NBER Working Papers 19580, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:19580
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    1. Flandreau, Marc & Gaillard, Norbert & Packer, Frank, 2011. "To err is human: US rating agencies and the interwar foreign government debt crisis," European Review of Economic History, Cambridge University Press, vol. 15(3), pages 495-538, December.
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    5. J. Boeckx, 2012. "What is the role played by the Eurosystem during the financial crisis ?," Economic Review, National Bank of Belgium, issue ii, pages 7-28, September.
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    More about this item

    JEL classification:

    • F0 - International Economics - - General
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • N0 - Economic History - - General
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-

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