Artikel "The highs and the lows: bank failures in Sweden through inflation and deflation, 1914–1926"


Artikeln är skriven av postdoc Séan Kenny vid Ekonomisk-historiska institutionen, LU, professor Anders Ögren vid Ekonomisk-historiska institutionen, UU och Liang Zhao, doktorand vid Ekonomisk-historiska institutionen, LU och publicerad i European Review of Economic History.


This paper revisits the Swedish banking crisis (1919–1926) that materialized as post-war deflation replaced wartime inflation (1914–1918). Inspired by Fisher’s “debt deflation theory,” we employ survival analysis to “predict” which banks would fail, given certain ex-ante bank characteristics. Our tests support the theory; maturity structures mattered most in a regime of falling prices, with vulnerable shorter-term customer loans and bank liabilities representing the most consistent cause of bank distress in the crisis. Similarly, stronger growth in (1) leverage, (2) weaker collateral loans, and (3) foreign borrowing during the boom were all associated with bank failure.

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