Canst Thou Beggar Thy Neighbour? - Evidence from the 1930s

Paul Bouscasse (Sciences Po) Canst Thou Beggar Thy Neighbour? April 10, 2024 16 / 26 Data Source: Foreign Commerce and Navigation of the United States Paul Bouscasse (Sciences Po) Canst Thou Beggar Thy Neighbour? April 10, 2024 17 / 26 Elasticity Results 1930-32 change 1930-33 change (1) (2) (3) (4) (5) (6) Quantity Price Quantity Quantity Price Quantity Panel A: Unweighted XR 0.910∗∗ −0.443∗∗∗ 1.. [...] strike) 4 Use variation in 3-month forward rate around announcement as shock Back Paul Bouscasse (Sciences Po) Canst Thou Beggar Thy Neighbour? April 10, 2024 34 / 120 Keywords Two requirements: 1 Name of the country or currency, name has to be in the title for countries other than US 2 Mentions of (i) exchange controls, (ii) leaving the gold standard, or (iii) devaluation in the article Example f. [...] Belgium Germany Italy Netherlands Switzerland UK US Back Paul Bouscasse (Sciences Po) Canst Thou Beggar Thy Neighbour? April 10, 2024 37 / 120 J-Curve Trade balance (p=0.00) 0 5 10 Back Paul Bouscasse (Sciences Po) Canst Thou Beggar Thy Neighbour? April 10, 2024 38 / 120 −0.20 0.00 0.20 0.40 Dates: Belgium Date # articles Event Shock 14nov1934 10 Catholics and liberals against devaluation -0.00. [...] HFI: Comparison Best way to compare the two is to compute the integral: ∑S Iy 1= βy S t+s s=1 Since the path of the nominal exchange rate is different, will also compute the ratio: IyRy = Ixr Back Paul Bouscasse (Sciences Po) Canst Thou Beggar Thy Neighbour? April 10, 2024 47 / 120 DD vs. [...] A permanent increase in the price of gold whose immediate effect on the money supply is offset by a corresponding permanent increase in the gold cover ratio: Λj E j0 = D̄ 0 = D̄ Λj j−1 E−1 Back Paul Bouscasse (Sciences Po) Canst Thou Beggar Thy Neighbour? April 10, 2024 90 / 120 GE Decomposition: Notations For output y , denote the first-order solutions: full model: {ŷ jFt } j∈J t≥0 monetary chan.