The Hungarian Twin Crisis of 1931

28 Pages Posted: 5 Apr 2019

See all articles by Flora Macher

Flora Macher

London School of Economics & Political Science (LSE)

Date Written: May 2019


Even though Germany, Austria, and Hungary experienced a major financial crisis simultaneously in 1931, of the three, only Germany's and Austria's episodes have been investigated in depth. This article offers a thorough assessment of the missing piece. It finds that, just like Germany, Hungary also experienced a twin crisis. The primary reason for the weakness of the financial sector was banks’ excessive exposure to agricultural loans. The fragility of the currency was the result of an early balance‐of‐payments crisis in 1928/9. The vulnerability of the banking and monetary systems culminated in a twin crisis in 1931.

Suggested Citation

Macher, Flora, The Hungarian Twin Crisis of 1931 (May 2019). The Economic History Review, Vol. 72, Issue 2, pp. 641-668, 2019. Available at SSRN: or

Flora Macher (Contact Author)

London School of Economics & Political Science (LSE)

Houghton Street
London, WC2A 2AE
United Kingdom

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