Did Nordic Countries Recognize the Gathering Storm of World War II? Evidence from the Bond Markets

Daniel Waldenström and Bruno Frey

CREMA Working Paper Series from Center for Research in Economics, Management and the Arts (CREMA)

Abstract: This paper analyzes and compares different ways of assessing how people perceived impending threats of war in the past. Conventional Nordic historiography of World War II claims there were few, if any, people in the Nordic countries who perceived a significantly increased threat of war between 1938 and early 1940. At the same time, historical methods face problems when it comes to capturing the often tacitly held beliefs of a large number of people in the past. In this paper, we analyze these assessments by looking at sudden shifts in sovereign debt yields and spreads in the Nordic bond markets at that time. Our results suggest that Nordic contemporaries indeed perceived significant war risk increases around the time of major war-related geopolitical events. While these findings question some ? but not all ? of standard Nordic World War II historiography, they also demonstrate the value of analyzing historical market prices to reassess the often tacitly held views and opinions of large groups of people in the past.

Keywords: Structural breaks; Sovereign debt; Capital markets; Historiography; Cliometrics; World War II (search for similar items in EconPapers)
JEL-codes: C22 G14 N01 N44 (search for similar items in EconPapers)
Date: 2007-10
New Economics Papers: this item is included in nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Did nordic countries recognize the gathering storm of World War II? Evidence from the bond markets (2008)
Working Paper: Did Nordic Countries Recognize the Gathering Storm of World War II? Evidence from the Bond Markets (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:cra:wpaper:2007-18

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