Financial Markets Facing Apocalypse in World War II
- Autores: Jeþdrzej Białkowski, Ehud I. Ronn
- Localización: Journal of European Economic History, ISSN 0391-5115, Vol. 46, Nº. 2, 2017, págs. 9-50
- Idioma: inglés
- Enlaces
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Resumen
This paper quantifies the impact of apocalyptic risk on capital markets, drawing on events in four countries during the Second World War: the republics of Poland and France, whose systems failed during the period in question, and the United Kingdom and Sweden, which survived politically, economically and financially. We closely link public information to markets’ incorporation of information regarding the probability of an Armageddon for each country. In contrast to past studies, our analysis shows that the stock markets of two of the countries in question – Poland and France – displayed limited ability to reflect the mortal danger to their sovereignty. The behavior of the other two countries’ stock markets appears to reflect some “learning” regarding the implications of systemic political failure.
