Jean-Laurent Cadorel,

Jean-Laurent Cadorel, PhD candidate from the Paris School of Economics will present his paper: An International Monetary Explanation of the 1929 Crash of the New York Stock Exchange.

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Abstract:
The crash of the New York Stock Exchange in October 1929 was a liquidity crisis caused by the removal of brokers’ loans. Based on high-frequency data, this paper documents how the Bank of England’s unexpected September discount rate rise attracted short-term international capital flows. The rate rise
had such exceptional effects because it caused a reallocation of gold reserves, attracting gold from the Americas to Europe, threatening some Latin American countries’ participation in the gold standard, depreciating the value of their debts in New York, and reducing bondholders’ willingness to lend.