Skip to main content
×
×
Home

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

  • Kevin Carey (a1)
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.

Copyright
References
Hide All
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.
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.
Eichengreen Barry. Golden Fetters: The Gold Standard and the Great Depression, 1919–1939. New York: Oxford University Press, 1995.
Eichengreen Barry, and Portes Richard. “Debt and Default in the 1930s: Causes and Consequences.” European Economic Review 30, no. 3 (1986): 599640.
Foreign Bondholders Protective Council, Annual Reports, New York, various years.
Friedman Philip. The Impact of Trade Destruction on National Incomes. University of Florida Social Sciences Monograph Number 52. Gainesville, FL, 1974.
Irwin Douglas A.The Smoot-Hawley Tariff: A Quantitative Assessment.” Review of Economics and Statistics 53, no. 2 (1998): 326–34.
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.
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), 173200.
Kindleberger Charles P.The World in Depression. Berkeley and Los Angeles: University of California Press, 1986.
Madden John T., Nadler Marcus, and Sauvain Harry C.. America's Experience as a Creditor Nation. New York: Prentice-Hall, 1937.
Mitchell B. R.International Historical Statistics: Europe, 1750–1988. rev. ed. New York: Stockton Press, 1992.
Mitchell B. R.International Historical Statistics: The Americas, 1750–1988. 2nd ed.New York: Stockton Press, 1993.
Mitchell B. R.International Historical Statistics: Africa, Asia, and Oceania, 1750–1988. 2nd rev. ed.New York: Stockton Press, 1995.
Thompson Aileen J.Trade Liberalization, Comparative Advantage, and Scale Economies: Stock Market Evidence from Canada.” Journal of International Economics 37, no. 1–2 (1994): 127.
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.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

The Journal of Economic History
  • ISSN: 0022-0507
  • EISSN: 1471-6372
  • URL: /core/journals/journal-of-economic-history
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
×

Metrics

Full text views

Total number of HTML views: 0
Total number of PDF views: 12 *
Loading metrics...

Abstract views

Total abstract views: 82 *
Loading metrics...

* Views captured on Cambridge Core between September 2016 - 17th January 2018. This data will be updated every 24 hours.