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Stock markets, banks and economic growth in the UK, 1850–1913

Published online by Cambridge University Press:  03 January 2019

Walter Jansson
Walter Jansson*
Affiliation:
University of Cambridge
*
W. Jansson, Cambridge Endowment for Research in Finance, Cambridge Judge Business School, University of Cambridge, Trumpington Street, Cambridge, cb2 1ag, UK; email: [email protected].
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Abstract

This article shows that neither stock markets nor commercial banks had a significant impact on the UK's economic growth from 1850 to 1913. These results are based on a new dataset on paid-in capital of securities listed on the UK's stock exchanges, which is analysed using a vector autoregression with time-varying parameters. Econometric results also indicate that the growth of the banking sector and the capital markets was, to a significant extent, driven by factors other than domestic economic growth.

Keywords

financial developmenteconomic growthTVP-VARUK

JEL classification

N13: Europe: Pre-1913 E44: Financial Markets and the Macroeconomy O16: Financial Markets • Saving and Capital Investment • Corporate Finance and Governance
Type
Articles
Information
Financial History Review , Volume 25 , Issue 3 , December 2018 , pp. 263 - 296
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Copyright
Copyright © European Association for Banking and Financial History e.V. 2019 

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Footnotes

I thank Cristiano Ristuccia, Duncan Needham, Olivier Accominotti, Craig McMahon, Alain Naef, Rasheed Saleuddin, Seung Woo Kim and other participants in the Financial History Workshop in Cambridge for their helpful comments. Thanks also to Chris Colvin, Flora Macher, the editors, an anonymous referee, and participants in the Financial History Review Fast-track Workshop in Turin. This research was conducted as part of my PhD, which was funded by the Emil Aaltonen Foundation, the Ellen McArthur Fund and the Osk. Huttunen Foundation, whose help is gratefully acknowledged.

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