Financialization–History, Economics, Politics

The widely held belief that financial deepening benefits the economy by efficiently allocating capital and diversifying risk was shaken to its core by the breadth and scope of the 2008/09 financial crisis. This research project combines 140 years of economic history with state-of-the-art econometric methods to gain new insights into the relationship between finance, growth and crises.

Housing Markets in History

For economists there is no price like home—at least not since the global financial crisis. Fluctuations in house prices and their importance for the macroeconomy have become a rapidly expanding research field. The economic history of advanced economies is spattered with narratives about booms and busts in real estate prices. Yet we know surprisingly little about long-run trends and cycles in house prices. This research project aims to fill this void.

Long-term Economic Persistence

Simply put, economic persistence examines the historical factors that affect economic performance today. As such, it combines insights from economic development, history and growth. Ultimately, it is a quest for the deep-rooted geographic, institutional, educational, genetic and cultural determinants of comparative economic development. This research project will emphasize the long-lasting legacy of colonialism with a special focus on Latin America.

Size of Finance

In the years prior to the recent financial crisis, wages and value added of the financial sector skyrocketed relative to the rest of the economy. This research project aims to provide new insights into the growth and change of the financial sector and to advance our understanding of common trends and differences across countries in its historical evolution. As a central part of the project, we construct a dataset to measure the contribution of the financial sector to GDP in advanced economies since 1870.


The Persistence of (Subnational) Fortune

with William F. Maloney — The Economic Journal, Vol. 126, Issue 598, pages 2363–2401. Using subnational historical data, this paper establishes the within country persistence of economic activity in the New World over the last half millennium, a period including the trauma of the European colonization, the decimation of the native populations, and the imposition […]

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with Oscar Jordà and Alan M. Taylor — Journal of the European Economic Association, Vol. 14, Issue 1. This paper studies the co-evolution of public and private sector debt in advanced countries since 1870. We find that in advanced economies financial stability risks have come from private sector credit booms and not from the expansion […]

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When Credit Bites Back

with Oscar Jordà and Alan M. Taylor —Journal of Money, Credit and Banking, Vol. 45(s2), pp. 3-28 Using data on 14 advanced countries between 1870 and 2008 we document two key facts of the modern business cycle: relative to typical recessions, financial crisis recessions are costlier, and more credit-intensive expansions tend to be followed by […]

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German Economic Review, Vol. 15, Issue 1, pp. 191–207. In this study, I draw on recent comparative studies of the macroeconomic history of advanced economies since 1870. I show that while both public and private debts have increased markedly, private, not public debts have climbed to historically unprecedented levels. Outside war times, financial crises have […]

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The Great Recession has focused renewed attention on the role of household leverage in the business cycle. Household debt overhang and the ensuing process of deleveraging are often cited as factors holding back economic recovery. This paper studies the relationship between household debt and economic performance during the Great Depression in the U.S. on the […]

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in: Hubert Bonin, Niels-Viggo Haueter, Alfredo Gigliobianco, and Harold James (ed.) Public Policies and the Direction of Financial Flows, Bucharest 2012 This paper tracks the history of government intervention in the U.S. mortgage market between 1932 and the 1960s, a period in which the system for housing finance underwent a fundamental transformation. Whereas prior to […]

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