Crowding in during the Seven Years’ War

Sissoko, Carolyn; Palma, Nuno

Abstract

We present a detailed study of the Seven Years’ War (1756–1763) using a new dataset based on the Bank of England minutes. We argue that the war and associated Bank of England actions led to a transformation of the financial system. Additionally, while there was short-term crowding out of private investment when interest rates rose due to the issue of war-related government debt, in the long-run there was crowding in: higher government spending led to an increase in private sector investment.

• Working Paper Type: Working Paper
• Deposit Date: May 4, 2023
• Publicly Available Date: May 4, 2023
• Series Number: EDP-2211
• Keywords: Bank of England, City of London, discount market, interest rates, crowding in, financial history
• Public URL: https://uwe-repository.worktribe.com/output/10337452
• Publisher URL: https://t.co/dYnIHYM45Q