Aggregate price shocks and financial stability: the United Kingdom 1796-1999
Michael Bordo,
Michael Dueker and
David Wheelock
No 2001-018, Working Papers from Federal Reserve Bank of St. Louis
Abstract:
This paper investigates the impact historically of aggregate price shocks on financial stability in the United Kingdom. We construct an annual index of U.K. financial conditions for 1790-1999 and use a dynamic probit model to estimate the effect of aggregate price shocks on the index. We find that price level shocks contributed significantly to financial instability during 1820-1931, and that inflation rate shocks contributed to instability during 1972-99. Both the nature of aggregate price shocks and their impact depend on the existing monetary and financial regime, but price shocks historically have been a source of financial instability.>
Keywords: Economic policy; Inflation (Finance); Prices (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (7)
Published in Explorations in Economic History, April 2003, 40(2), pp. 143-69
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Journal Article: Aggregate price shocks and financial stability: the United Kingdom 1796-1999 (2003) 
Working Paper: Aggregate Price Shocks and Financial Stability: The United Kingdom 1796-1999 (2001) 
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedlwp:2001-018
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DOI: 10.20955/wp.2001.018
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