The German twin crisis of 1931

Schnabel, Isabel

Preview

PDF
dp02_48.pdf - Published
Download (666kB)

URL:	https://ub-madoc.bib.uni-mannheim.de/2783
URN:	urn:nbn:de:bsz:180-madoc-27836
Document Type:	Working paper
Year of publication:	2002
The title of a journal, publication series:	Rationalitätskonzepte, Entscheidungsverhalten und ökonomische Modellierung
Volume:	02-48
Place of publication:	Mannheim
Publication language:	English
Institution:	School of Law and Economics > Sonstige - Fakultät für Rechtswissenschaft und Volkswirtschaftslehre
MADOC publication series:	Sonderforschungsbereich 504 > Rationalitätskonzepte, Entscheidungsverhalten und ökonomische Modellierung (Laufzeit 1997 - 2008)
Subject:	330 Economics
Subject headings (SWD):	Deutschland , Bankenkrise , Währungskrise , Geschichte
Abstract:	Using information on banks' balance sheets, we analyze the causal links between the banking and the currency problems in the German financial crisis of 1931. We find that the currency problems were caused by political shocks, while the problems in the banking sector were the result of excessive risk-taking by banks that were 'too big to fail'. Due to the high levels of foreign debt in the banking system, the run on the currency and the deposit withdrawals reinforced each other in a vicious circle and resulted in a banking panic and the abandonment of the gold standard.
Additional information: