The Cash Nexus: Money and Politics in Modern History, 1700-2000

by Niall Ferguson

  Appendices

  A. THE BIGGEST WARS IN HISTORY (See p. 37)

  Source: Levy, War, table 4.1. I have added together his data for the Thirty Years War, which he subdivided in three. I have also amended his totals for battlefield deaths for the world wars, which were too low. World population figures used in calculating the final column are the lower estimates from the table produced by the US Census Department (www.census.gov/ipc/www/worldhis.html).

  B. MULTIPLE REGRESSION OF BRITISH GOVERNMENT POPULARITY AND ECONOMIC INDICATORS (See p. 237)

  (a) Adjusted R2, 1951–1964 to 1997–2000

  (b) Detailed regression breakdown, 1951–1964 to 1997–2000

  Sources: Butler and Butler, British Political Facts; Central Statistical Office, Monthly Digest of Statistics; HMSO, Ministry of Labour Gazette; Central Statistical Office, Retail Prices 1914–1990. Recent data are from the following websites: Bank of England, HM Treasury, statistics.gov.uk, except for the opinion poll data, which are from the Gallup Organization (as published in the Daily Telegraph).

  Notes: The indicators used in the analysis are as follows:

  Government lead: percentage of respondents who would vote for governing party if an election were held tomorrow less percentage who would vote for principal Opposition party.

  RPI: retail price index, percentage change over the previous year. Unemployment figures (defined from January 1971 as the claimant count) are given without seasonal adjustment.

  Base rates: Bank of England base rate at end of month.

  B statistic: A one-unit rise in the variable correlates with a B per cent increase or decrease in government popularity.

  Significance: Y: less than 5 per cent chance that the relationship is random; N: more than 5 per cent chance that the relationship is random.

  C. THE GLOBAL BOND MARKET, JUNE 1999 (See p. 282)

  Sources: Financial Times, 28 January 2000; Bank for International Settlements, Annual Report 1999, table VII. 4.

  D. PUBLIC DEBT BURDENS IN 1887–1888 (See p. 304)

  Note: Mexico and Peru were in default, and Austria–Hungary, Russia, Italy, Japan, Argentina and Brazil had depreciated paper currency (‘estimated to entail a 5 per cent burden on these countries’). Turkey’s reduced debt calculated as yielding 1 per cent.

  Source: Nash, Fenn’s Compendium, pp. x–xiv.

  E. ECONOMIC AND SOCIAL INDICATORS AND THE INTER-WAR CRISIS OF DEMOCRACY, 1919–1938 (See p. 361)

  Bibliography

  Abelshauser, Werner (ed.), Die Weimarer Republik als Wohlfahrtsstaat: Zum Verhältnis von Wirtschafts- und Sozialpolitik in der Industriegesellschaft [Vierteljahrsschrift für Sozial- und Wirtschaftsgeschichte, Beiheft 81](1987).

  —— ‘Germany: Guns, Butter and Economic Miracles’, in Mark Harrison (ed.), The Economics of World War II: Six Great Powers in International Comparison (Cambridge, 1998), 122–76.

  Adamson, John, ‘England without Cromwell: What if Charles I had Avoided the Civil War?’, in Niall Ferguson (ed.), Virtual History: Alternatives and Counterfactuals (London, 1997), 91–124.

  Albertini, Luigi, The Origins of the War, 3 vols. (Oxford, 1953).

  Alesina, Alberto, ‘The End of Large Public Debts’, in F. Giavazzi and L. Spaventa (eds.), High Public Debt: The Italian Experience (Cambridge, 1988), 34–79.

  —— ‘The Political Economy of the Budget Surplus in the U.S.’, NBER Working Paper, 7496 (2000).

  —— and Sachs, Jeffrey, ‘Political Parties and the Business Cycle in the United States, 1948–1984’, Journal of Money, Credit and Banking, 20, 1 (Feb. 1988), 63–82.

  —— and Rosenthal, Howard, ‘Partisan Cycles in Congressional Elections and the Macroeconomy’, American Political Science Review, 83, 2 (June 1989), 373–98.

  —— and Roubini, Nouriel, ‘Political Cycles in OECD Economies’, NBER Working Paper, 3478 (October 1990).

  —— Cohen, Gerald D., and Roubini, Nouriel, ‘Macroeconomic Policy and Elections in OECD Democracies’, NBER Working Paper, 3830 (1991).

  —— and Rodrik, D., ‘Distributive Policies and Economic Growth’, NBER Working Paper, 3668 (1991).

  —— Oezler, Sule, Roubini, Nouriel, and Zwagel, Phillip, ‘Political Instability and Economic Growth’, NBER Working Paper, 4173 (1992).

  —— and Summers, Lawrence H., ‘Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence’, Journal of Money, Credit and Banking, 25, 2 (May 1993), 151–62.

  —— and Perotti, Roberti, ‘The Political Economy of Budget Deficits’, NBER Working Paper, 4637 (1994).

  —— and Spolaore, Enrico, ‘On the Number and Size of Nations’, NBER Working Paper, 5050 (1995).

  —— —— ‘International Conflict, Defence Spending and the Size of Countries’, NBER Working Paper, 5694 (1996).

  —— and Wacziarg, Romain, ‘Openness, Country Size and the Government’, NBER Working Paper, 6024 (1997).

  —— Spolaore, Enrico, and Wacziarg, Romain, ‘Economic Integration and Political Disintegration’, NBER Working Paper, 6163 (1997).

  Almond, Mark, ‘1989 Without Gorbachev: What if Communism had not Collapsed?’, in Niall Ferguson (ed.), Virtual History: Alternatives and Counterfactuals (London, 1997), 392–415.

  Alt, James E., The Politics of Economic Decline (Cambridge, 1979).

  —— ‘Ambiguous Intervention: The Role of Government Action in Public Evaluation of the Economy’, in Helmut Norpoth, Michael S. Lewis-Beck and Jean-Dominique Lafay (eds.), Economics and Politics: The Calculus of Support (Ann Arbor, 1991), 239–63.

  Anderson, Christopher, Blaming the Government: Citizens and the Economy in Five European Democracies (Armonk, NY, 1995).

  Anderson, Olive, ‘Loans versus Taxes: British Financial Policy in the Crimean War’, Economic History Review (1963), 314–27.

  Andic, Suphan, and Veverka, Jindrich, ‘The Growth of Government Expenditure in Germany since the Unification’, Finanzarchiv (1964), 171–278.

  Angell, Norman, The Great Illusion (London, 1913).

  Apostol, P. N., Bernatzky M.W. and Michelson, A. M., Russian Public Finances during the War (New Haven, 1928).

  Ash, Timothy Garton, The History of the Present (London, 1999).

  Atkinson, A. B., The Economic Consequences of Rolling Back the Welfare State (Cambridge, Mass., 1999).

  Auerbach, Alan J., and Kotlikoff, Laurence J., Macroeconomics: An Integrated Approach (2nd edn., Cambridge, Mass., 1998).

  —— —— and Leibfritz, Willi (eds.), Generational Accounting Around the World (Chicago, 1999).

  —— Gokhale, Jagadeesh, and Kotlikoff, Laurence J., ‘Generational Accounts: A Meaningful Alternative to Deficit Accounting,’ in D. Bradford (ed.), Tax Policy and the Economy, 5 (Cambridge, Mass., 1991), 55–110.

  —— —— —— ‘Generational Accounting: A Meaningful Way to Assess Generational Policy’, Journal of Economic Perspectives (Winter 1994), 73–94.

  Aughey, A., and Norton, P., Conservatives and Conservatism (London, 1981).

  Bagehot, Walter, Lombard Street: A Description of the Money Market (London, 1873).

  Baker, Kenneth, The Turbulent Years: My Life in Politics (London, 1993).

  Balderston, Theo, ‘War Finance and Inflation in Britain and Germany, 1914–1918’, Economic History Review (1989), 222–44.

  —— The German Economic Crisis, 1923–1932 (Berlin, 1993).

  Bankers Trust Company, English Public Finance (New York, 1920).

  —— French Public Finance (New York, 1920).

  Bardi, Luciano, and Morlino, Leonardo, ‘Italy: Tracing the Roots of the Great Transformation’, in Richard S. Katz and Peter Mair (eds.), How Parties Organize: Change and Adaptation in Party Organizations in Western Democracies (Thousand Oaks, Calif., 1994), 242–77.

  Barro, Robert J., ‘Are Government Bonds Net Wealth?’, Journal of Political Economy (1974), 1095–1118.

  —— ‘On the Determination of the Public Debt’, Journal of Political Economy, 87, 5 (1979), 940–71
.

  —— Macroeconomics (2nd edn., New York, 1987).

  —— ‘Government Spending, Interest Rates, Prices and Budget Deficits in the United Kingdom, 1730–1918’, Journal of Monetary Economics (1987), 221–47.

  —— ‘Determinants of Economic Growth: A Cross-Country Empirical Study’, NBER Working Paper, 5698 (August 1996).

  —— ‘Reflections on Ricardian Equivalence’, in John Maloney (ed.), Debt and Deficits: An Historical Perspective (Cheltenham, 1998), 47–59.

  —— ‘Optimal Funding Policy’, in G. Calvo and M. King (eds.), The Debt Burden and its Consequences for Monetary Policy (London, 1998), 69–80.

  —— and Sala-i-Martin, Xavier, ‘World Real Interest Rates’, in NBER Macroeconomics Annual 1990 (Cambridge, Mass., 1990), 15–59.

  Barsky, R. B., ‘The Fisher Hypothesis and the Forecastability and Persistence of Inflation’, Journal of Monetary Economics, 19, 1 (1987), 3–24.

  Batley, Richard, and Ferguson, Niall, ‘Event Risk and the International Bond Market in the Era of the Classical Gold Standard’, unpublished paper (1999).

  Baumol, W., ‘Enterpreneurship in Economic Theory’, American Economic Review, 58 (1968), 64–71.

  Bayoumi, Tamim, ‘Saving-Investment Correlations: Immobile Capital, Goverment Policy or Endogenous Behaviour’, IMF Working Paper, 89/66 (1990).

  —— Goldstein, Morris, and Woglom, Geoffrey, ‘Do Credit Markets Discipline Sovereign Borrowers? Evidence from the US States’, Journal of Money, Credit and Banking (1995), 1046–59.

  —— Eichengreen, Barry, and Taylor, Mark P., ‘Introduction’, in Tamim Bayoumi, Barry Eichengreen and Mark P. Taylor (eds.), Modern Perspectives on the Gold Standard (Cambridge, 1996), 3–16.

  Beevor, Anthony, Stalingrad (London, 1999).

  Bellucci, Paolo, ‘Italian Economic Voting: A Deviant Case or Making a Case for a Better Theory?’ in Helmut Norpoth, Michael S. Lewis-Beck and Jean-Dominique Lafay (eds.) Economics and Politics: The Calculus of Support (Ann Arbor, 1991), 63–81.

  Benjamin, D. K., and Kochin, L. A., ‘War, Prices and Interest Rates: A Martial Solution to Gibson’s Paradox’, in Michael D. Bordo and Anna J. Schwartz (eds.), A Retrospective on the Classical Gold Standard (Chicago/London, 1984), 587–604.

  Benn, Tony, Out of the Wilderness: Diaries 1963–7 (London, 1987).

  —— Conflicts of Interest: Diaries, 1977–80 (London, 1990).

  Bergsten, C. Fred, ‘America and Europe: Clash of the Titans’, Foreign Affairs (March/April 1999), 20–34.

  Berlin, Isaiah, ‘Benjamin Disraeli and Karl Marx’, in id., Against the Current: Essays in the History of Ideas, ed. Henry Hardy (Oxford, 1981), 252–86.

  Bernstein, Peter L., Against the Gods: The Remarkable Story of Risk (New York, 1996).

  Berthold, Norbert, Fehn, Rainer and Thode, Eric, ‘Real Wage Rigidities, Fiscal Policy, and the Stability of EMU in the Transition Phase’, IMF Working Paper, 99/83 (June 1999).

  Bille, Lars, ‘Denmark: The Decline of the Membership Party’, in Richard S. Katz and Peter Mair (eds.), How Parties Organize: Change and Adaptation in Party Organizations in Western Democracies (Thousand Oaks, Calif., 1994), 134–57.

  Black, Jeremy, ‘Foreign and Defence Policies: The Challenge of Europe’, in Keith Sutherland (ed.), The Rape of the Constitution (London, 2000) 285–90.

  Blackbourn, David, and Eley, Geoff, The Peculiarities of German History: Bourgeois Society and Politics in Nineteenth-century Germany (Oxford, 1984).

  Blais, André, and Massicotte, Louis, ‘Electoral Systems’, in Lawrence LeDuc and Richard G. Niemi (eds.), Comparing Democracies: Elections and Voting in Global Perspective (Thousand Oaks, Calif., 1996), 49–82.

  Blake, Robert, Disraeli (London, 1966).

  —— The Conservative Party from Peel to Major (London, 1997).

  Bloch, Ivan S., Is War Now Impossible? Being an Abridgment of ‘The War of the Future in its Technical, Economic and Political Relations’ (London, 1899).

  Bloom, Howard S., and Price, H. Douglas, ‘Voter Response to Short-Run Economic Conditions: The Asymmetric Effect of Prosperity and Recession’, American Political Science Review, 69 (1975) 1240–1254.

  Bloomfield, Arthur Irving, Monetary Policy under the International Gold Standard, 1880–1914 (New York, 1959).

  —— Short-term Capital Movements under the Pre-1914 Gold Standard (Princeton, 1963).

  Bogdanor, Vernon, Power and the People: A Guide to Constitutional Reform (London, 1997).

  Bollen, K. A., ‘Political Democracy and the Timing of Development’, American Sociological Review, 44 (1979), 572–87.

  —— ‘Issues in the Comparative Measurement of Political Democracy’, American Sociological Review, 45 (1980), 370–90.

  —— ‘Liberal Democracy: Validity and Method Factors in Cross-National Measures’, American Journal of Political Science, 37 (1993), 1207–30.

  —— and Jackman, R., ‘Political Democracy and the Size and Distribution of Income’, American Sociological Review, 50 (1985), 438–57.

  Bond, Brian, Victorian Military Campaigns (London, 1967).

  Bonney, Richard (ed.), Economic Systems and State Finance (Oxford, 1995).

  —— ‘Introduction’, in id. (ed.), Economic Systems and State Finance (Oxford, 1995), 1–18.

  —— ‘Early Modern Theories of State Finance’, in id. (ed.), Economic Systems and State Finance (Oxford, 1995), 163–229.

  —— ‘The Eighteenth Century, II: The Struggle for Great Power Status and the End of the Old Fiscal Regime’, in id. (ed.), Economic Systems and State Finance (Oxford, 1995), 315–90.

  —— ‘Revenues’, in id. (ed.), Economic Systems and State Finance (Oxford, 1995), 423–505.

  —— (ed.), The Rise of the Fiscal State in Europe, c.1200–1815 (Oxford, 1999).

  —— ‘France, 1494–1815’, in id. (ed.), The Rise of the Fiscal State in Europe, c. 1200–1815 (Oxford, 1999), 123–76.

  Borchardt, Knut, ‘Währung und Wirtschaft’, in Deutsche Bundesbank (ed.), Währung und Wirtschaft in Deutschland, 1876–1975 (Frankfurt am Main, 1976), 1–53.

  —— ‘Das Gewicht der Inflationsangst in den wirtschaftspolitischen Entscheidungsprozessen während der Weltwirtschaftskrise’, in Gerald D. Feldman and E. Müller-Luckner (eds.), Die Nachwirkungen der Inflation auf die deutsche Geschichte, 1924–1933 (Munich, 1985), 233–60.

  Bordes, W. de, The Austrian Crown: Its Depreciation and Stabilisation (London, 1924).

  Bordo, Michael D., ‘The Gold Standard: The Traditional Approach’, in Michael D. Bordo and Anna J. Schwartz (eds.), A Retrospective on the Classical Gold Standard (Chicago/London, 1984), 23–113.

  —— ‘Financial Crises, Banking Crises, Stock Market Crashes and the Money Supply: Some International Evidence, 1870–1933’, in F. Capie and G. E. Wood (eds.), Financial Crises and the World Banking System (London, 1986), 190–248.

  —— ‘The Bretton Woods International Monetary System: A Historical Overview’, in Michael D. Bordo and Barry Eichengreen (eds.), A Retrospective on the Bretton Woods System: Lessons for International Monetary Reform (Chicago/London, 1993), 3–98.

  —— ‘Gold as a Commitment Mechanism: Past, Present and Future’, World Gold Council Research Study, 11 (n.d. [1994]).

  —— ‘The Classical Gold Standard: Some Lessons for Today’, Federal Reserve Bank of St Louis Review, 63, 5 (1981), repr. in id., The Gold Standard and Related Regimes (Cambridge, 1999), 149–78.

  —— and Kydland, Finn E., ‘The Gold Standard as a Commitment Mechanism’, in Tamim Bayoumi, Barry Eichengreen and Mark P. Taylor (eds.), Modern Perspectives on the Gold Standard (Cambridge, 1996), 55–100.

  —— and White, Eugene N., ‘A Tale of Two Currencies: British and French Finance during the Napoleonic War’, Journal of Economic History, 51 (1991), 303–16.

  —— and Rockoff, Hugh, ‘The Gold Standard as a “Good Housekeeping Seal of Approval”’, in Michael D. Bordo., The Gold Standard and Related Regimes (Cambridge, 1999), 318�
�66.

  —— —— ‘Was Adherence to the Gold Standard a “Good Housekeeping Seal of Approval” during the Interwar Period?’, NBER Working Paper, 7186 (June 1999).

  —— and Schwartz, Anna J., ‘The Changing Relationship between Gold and the Money Supply’, World Gold Council Research Study, 4 (n.d. [1993]).

  —— —— ‘The Operation of the Specie Standard: Evidence for Core and Peripheral Countries’, in Barry Eichengreen and Jorge Braga de Macedo (eds.), Historical Perspectives on the Gold Standard: Portugal and the World (London, 1996).

  —— —— ‘Monetary Policy Regimes and Economic Performance: The Historical Record’, NBER Working Paper, 6201 (Sept. 1997).

  —— —— ‘Measuring Real Economic Effects of Bailouts: Historical Perspectives on How Countries in Financial Distress have Fared With and Without Bailouts’, paper presented at the Carnegie Rochester Conference on Public Policy (19–20 Nov. 1999).

  —— and Jonung, Lars, ‘Return to the Convertibility Principle? Monetary and Fiscal Regimes in Historical Perspective’, paper presented at the International Economic Association conference in Trento, Italy (Sept. 1997).

  —— —— ‘The Future of EMU: What Does the History of Monetary Unions Tell Us?’, paper presented at City University Business School and American Express Conference on Monetary Unions (29 Apr. 1999).

  —— Eichengreen, Barry and Irwin, Douglas A., ‘Is Globalization Today Really Different Than Globalisation a Hundred Years Ago?’, NBER Working Paper, 7195 (June 1999).

  —— and Dewald, William G., ‘Historical Bond Market Inflation Credibility’, paper presented at the Annual Western Economic Association Conference, San Diego (8 July 1999).

  —— and Eichengreen, Barry, ‘Is Our International Economic Environment Unusually Crisis Prone?’, paper presented at the Reserve Bank of Australia Conference on Private Capital Flows, Sydney (9–10 Aug. 1999).