Using Financial Markets to Analyze History: The Case of the Second World War

Institute for Empirical Research in Economics Working Paper No. 335

27 Pages Posted: 18 Oct 2007

See all articles by Bruno S. Frey

Bruno S. Frey

CREMA; University of Basel

Daniel Waldenström

Research Institute of Industrial Economics

Date Written: October 2007

Abstract

A central aspect of historical research is to provide explanations for the causes and effects of events that occurred in the past, in particular the Second World War. History can be analyzed and explained from different perspectives. Two such perspectives are considered, the first being the traditional historiographic approach, in which the main emphasis is on the qualitative analysis of various kinds of historical sources and documents, and the second being what we call the financial market approach, a recent methodology for linking significant changes in historical market prices to simultaneously occurring geopolitical events. The fundamental characteristics of the two approaches are identified and compared in answering some important historical questions concerning the Second World War. The financial market approach, as reflected in the secondary market for government bonds, is studied for various countries. Both approaches rely heavily on interpretation - but in different ways. They complement each other in a useful way.

Keywords: financial markets, government bonds, history, World War II

JEL Classification: Z0, D70, F3, G1

Suggested Citation

Frey, Bruno S. and Waldenstrom, Daniel, Using Financial Markets to Analyze History: The Case of the Second World War (October 2007). Available at SSRN: https://ssrn.com/abstract=1021224 or http://dx.doi.org/10.2139/ssrn.1021224

Bruno S. Frey (Contact Author)

CREMA ( email )

Südstrasse 11
Zurich, CH 8008
Switzerland
+41 44 380 00 78 (Phone)

University of Basel ( email )

Peter Merian-Weg 6
Basel, 4002
Switzerland

Daniel Waldenstrom

Research Institute of Industrial Economics ( email )

P.O. Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

HOME PAGE: http://www.ifn.se/danielw

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