Consols, Financial Stability, and Pax Britannia

Claremont McKenna College Economics Working Paper No. 2004-05

Posted: 20 Apr 2004

See all articles by William O. Brown

William O. Brown

University of North Carolina (UNC) at Greensboro

Richard C. K. Burdekin

Claremont McKenna College - Robert Day School of Economics and Finance

Marc Weidenmier

Claremont McKenna College - Robert Day School of Economics and Finance; National Bureau of Economic Research (NBER)

Date Written: April 2004

Abstract

This paper identifies a sharp decline in the volatility of consol prices after the end of the Napoleonic wars in 1815. The volatility of consol returns drops by more than half after 1815 and our empirical testing confirms a long period of remarkable stability that includes the entire Victorian era at the height of the Pax Britannia. Over our 1729-1959 sample period significant shifts in the consol series, reflecting military events and monetary and fiscal policy shifts, are concentrated in the period between the Seven Years' War and Waterloo. There are no outliers between 1816 and 1914.

Keywords: consols, British empire, war, policy regimes

JEL Classification: E6, H3, N2

Suggested Citation

Brown, William O. and Burdekin, Richard C. K. and Weidenmier, Marc D., Consols, Financial Stability, and Pax Britannia (April 2004). Claremont McKenna College Economics Working Paper No. 2004-05, Available at SSRN: https://ssrn.com/abstract=532843

William O. Brown (Contact Author)

University of North Carolina (UNC) at Greensboro ( email )

Bryan School of Business
PO Box 26165
Greensboro, NC 274026165
United States
336-256-0110 (Phone)

Richard C. K. Burdekin

Claremont McKenna College - Robert Day School of Economics and Finance ( email )

500 E. Ninth Street
Claremont, CA 91711
United States

Marc D. Weidenmier

Claremont McKenna College - Robert Day School of Economics and Finance ( email )

500 E. Ninth St.
Claremont, CA 91711-6420
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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