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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26117
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| Title: | The Empire Effect: The Determinants of Country Risk in the First Age of
Globalization, 1880-1913 |
| Authors: | Ferguson, Niall
Schularick, Moritz |
| Issue Date: | 2004 |
| Series/Report no.: | EC-04-03 |
| Abstract: | This paper reassesses the importance of colonial status to investors
before 1914 by means of multivariable regression analysis of the data
available to contemporaries. We show that British colonies were able to
borrow in London at significantly lower rates of interest than
non-colonies precisely because of their colonial status, which mattered
more than either gold convertibility or a balanced budget. Allowing for
differences not only in monetary and fiscal policy but also in economic
development and location, the “Empire effect” was a discount
of around 100 basis points. We conclude that investors saw colonial
status as a no-default guarantee. |
| URI: | http://hdl.handle.net/2451/26117 |
| Appears in Collections: | Economics Working Papers
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