Hostname: page-component-5c6d5d7d68-txr5j Total loading time: 0 Render date: 2024-08-25T13:01:45.453Z Has data issue: false hasContentIssue false
  • English
  • Français

Investigating a Debt Channel for the Smoot-Hawley Tariffs: Evidence from the Sovereign Bond Market

Published online by Cambridge University Press:  03 March 2009

Kevin Carey
Kevin Carey
Affiliation:
Kevin Carey is Assistant Professor, American University, Department of Economics, 4400 Massachusetts Ave., NW, Washington, DC 20016-8029. E-mail kcarey@american.edu.
Get access Rights & Permissions [Opens in a new window]

Abstract

I examine the change in prices of foreign sovereign dollar bonds over several weeks in 1930 that marked major legislative progress for the Smoot-Hawley tariffs. If the market was preoccupied by anticipated debt-repayment problems arising from the tariffs, this should be visible in the cross-countty pattern of bond prices. The bond price data are compared to indicators of country sensitivity to the tariffs and debt service. A significant relationship is found for bond price changes in June 1930, but the size of the effect is very small. Analysis at the regional and individual country level reveals some puzzling cases.

Type
Articles
Information
The Journal of Economic History , Volume 59 , Issue 3 , September 1999 , pp. 748 - 761
Copyright
Copyright © The Economic History Association 1999

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Bernanke, Ben S. “Review of The Great Depression, 1929–38: Lessons for the 1980s by Christian Saint-Etienne.” Journal of Political Economy 93, no. 4 (1985): 831–35.Google Scholar
Crucini, Mario J., and Kahn, James. “Tariffs and Aggregate Economic Activity: Lessons from the Great Depression.” Journal of Monetary Economics 38, no. 3 (1996) 427–67.Google Scholar
Eichengreen, Barry. Golden Fetters: The Gold Standard and the Great Depression, 1919–1939. New York: Oxford University Press, 1995.Google Scholar
Eichengreen, Barry, and Portes, Richard. “Debt and Default in the 1930s: Causes and Consequences.” European Economic Review 30, no. 3 (1986): 599–640.Google Scholar
Foreign Bondholders Protective Council, Annual Reports, New York, various years.Google Scholar
Friedman, Philip. The Impact of Trade Destruction on National Incomes. University of Florida Social Sciences Monograph Number 52. Gainesville, FL, 1974.Google Scholar
Irwin, Douglas A. “The Smoot-Hawley Tariff: A Quantitative Assessment.” Review of Economics and Statistics 53, no. 2 (1998): 326–34.Google Scholar
Irwin, Douglas A. “From Smoot-Hawley to Reciprocal Trade Agreements: Changing the Course of U.S. Trade Policy in the 1930s.” In The Defining Moment: The Great Depression and the American Economy in the Twentieth Century, edited by Bordo, Michael D., Goldin, Claudia, and White, Eugene N., 325–52. Chicago: University of Chicago Press, 1998.Google Scholar
Irwin, Douglas A., and Kroszner, Randall S.. “Log Rolling and Economic Interests in the Passage of the Smoot-Hawley Tariff.” Carnegie-Rochester Conference Series in Public Policy 45, 1–4 (1996), 173–200.Google Scholar
Kindleberger, Charles P.The World in Depression. Berkeley and Los Angeles: University of California Press, 1986.Google Scholar
Madden, John T., Nadler, Marcus, and Sauvain, Harry C.. America's Experience as a Creditor Nation. New York: Prentice-Hall, 1937.Google Scholar
Mitchell, B. R.International Historical Statistics: Europe, 1750–1988. rev. ed. New York: Stockton Press, 1992.CrossRefGoogle Scholar
Mitchell, B. R.International Historical Statistics: The Americas, 1750–1988. 2nd ed.New York: Stockton Press, 1993.Google Scholar
Mitchell, B. R.International Historical Statistics: Africa, Asia, and Oceania, 1750–1988. 2nd rev. ed.New York: Stockton Press, 1995.Google Scholar
Thompson, Aileen J. “Trade Liberalization, Comparative Advantage, and Scale Economies: Stock Market Evidence from Canada.” Journal of International Economics 37, no. 1–2 (1994): 1–27.Google Scholar
Willard, Kristen L., Guinnane, Timothy W., and Rosen, Harvey S.. “Turning Points in the Civil War: Views from the Greenback Market.” American Economic Review 86, no. 4 (1996): 1001–18.Google Scholar