Global Cycles: Capital Flows, Commodities, and Sovereign Defaults, 1815-2015
American Economic Review
vol. 106,
no. 5, May 2016
(pp. 574-80)
Abstract
Capital flow and commodity cycles have long been connected with economic crises. Sparse historical data, however, has made it difficult to connect their timing. We date turning points in global capital flows and commodity prices across two centuries and provide estimates from alternative data sources. We then document a strong overlap between the ebb and flow of financial capital, the commodity price super-cycle, and sovereign defaults since 1815. The results have implications for today, as many emerging markets are facing a double bust in capital inflows and commodity prices, making them vulnerable to crises.Citation
Reinhart, Carmen M., Vincent Reinhart, and Christoph Trebesch. 2016. "Global Cycles: Capital Flows, Commodities, and Sovereign Defaults, 1815-2015." American Economic Review, 106 (5): 574-80. DOI: 10.1257/aer.p20161014Additional Materials
JEL Classification
- E32 Business Fluctuations; Cycles
- F21 International Investment; Long-Term Capital Movements
- F32 Current Account Adjustment; Short-Term Capital Movements
- F44 International Business Cycles
- N20 Economic History: Financial Markets and Institutions: General, International, or Comparative
- Q02 Commodity Markets