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Measuring Inflation Expectations in Interwar Britain

Lennard, Jason LU ; Meinecke, Finn and Solomou, Solomos (2023) In Economic History Review 76(3). p.844-870
Abstract
What caused the recovery from the British Great Depression? A leading explanation – the ‘expectations channel’ – suggests that a shift in expected inflation lowered real interest rates and stimulated consumption and investment. However, few studies have measured, or tested the economic consequences of, inflation expectations. In this paper, we collect high-frequency information from primary and secondary sources to measure expected inflation in the United Kingdom between the wars. A high-frequency vector autoregression suggests that inflation expectations were an important source of the early stages of economic recovery in interwar Britain.
Please use this url to cite or link to this publication:
author
; and
publishing date
type
Contribution to journal
publication status
published
subject
keywords
E3, E6, N14, Great Depression, inflation expectations, interwar Britain, regime change
in
Economic History Review
volume
76
issue
3
pages
844 - 870
publisher
Wiley-Blackwell
external identifiers
  • scopus:85140367220
ISSN
1468-0289
DOI
10.1111/ehr.13215
language
English
LU publication?
no
id
fa67e9b8-1bd0-4a12-ac83-066e71c77cf0
date added to LUP
2022-09-16 15:01:18
date last changed
2023-07-03 11:43:32
@article{fa67e9b8-1bd0-4a12-ac83-066e71c77cf0,
  abstract     = {{What caused the recovery from the British Great Depression? A leading explanation – the ‘expectations channel’ – suggests that a shift in expected inflation lowered real interest rates and stimulated consumption and investment. However, few studies have measured, or tested the economic consequences of, inflation expectations. In this paper, we collect high-frequency information from primary and secondary sources to measure expected inflation in the United Kingdom between the wars. A high-frequency vector autoregression suggests that inflation expectations were an important source of the early stages of economic recovery in interwar Britain.}},
  author       = {{Lennard, Jason and Meinecke, Finn and Solomou, Solomos}},
  issn         = {{1468-0289}},
  keywords     = {{E3; E6; N14; Great Depression; inflation expectations; interwar Britain; regime change}},
  language     = {{eng}},
  number       = {{3}},
  pages        = {{844--870}},
  publisher    = {{Wiley-Blackwell}},
  series       = {{Economic History Review}},
  title        = {{Measuring Inflation Expectations in Interwar Britain}},
  url          = {{http://dx.doi.org/10.1111/ehr.13215}},
  doi          = {{10.1111/ehr.13215}},
  volume       = {{76}},
  year         = {{2023}},
}