Professor: Graciela Kaminsky
Department: Economics
Title: Two Hundred Years of Financial Globalization
Description: This project compares two episodes of financial globalization.
The first episode started with the end of the Napoleonic Wars (1803-1815).
The end of these wars fueled a reduction of public spending and a bonanza in
international lending as interest rates in England and France sharply
declined. This episode ended with the Great Depression in 1931. It is at
the onset of the Great Depression that governments around the world erected
barriers to capital mobility in their effort to eliminate volatility in
financial markets. International capital markets basically disappeared.
The second episode of financial globalization restarted with the collapse of
the Bretton Woods System in the early 1970s. As exchange rates started to
fluctuate, governments around the world could implement an independent
monetary policy without the need of capital controls. Controls on capital
mobility were abandoned and international capital flows restarted.
This project examines the characteristics of international capital flow booms
and busts in these two episodes of financial globalization. Are capital
flows becoming more unstable? Do all capital flow bonanzas end in financial
crises? Do Central Banks in the financial center fuel volatility in capital
flows to the periphery? What type of shocks trigger turmoil in international
capital markets?
The project involves the creation of two databases for the first episode of
financial globalization. For the first database, students collect
information on international capital flows using data on bonds and shares
issued in the financial centers of that time: London, Paris, Berlin, Hamburg,
Frankfurt, and New York. For the second database, students collect data on
prices of government bonds in the financial centers and data on a variety of
news using the digital collection of the London Times and the Economist
during the 19th century and early 20th century.
Duties: Students may be involved in the creation of the two databases. The
data on bonds and shares issued in the financial centers as well as the data
on prices of government bonds is in photos taken in archives. The data on
economic, political, and financial news is collected from the London Times
(for the years 1820 to 1842) and from the Economist (for the years 1843 to
1931). Students will work under the supervision of faculty and periodical
meetings will be set to help the students in their work.
Time commitment: 10 or more hours per week (average)
Credit hour option*: 3
Number of openings: 2
Submit Cover Letter/Resume to: graciela@gwu.edu
*If credit is sought, all registration deadlines and requirements must be
met. Students selected to be research assistants should contact Brianna
Crayton (bcrayton@gwu.edu) whether they intend to pursue credit or not.
