Financial History Database: The Great Depression

Hardly any episode in financial and political history has demonstrated such upheaval as the interwar years. Germany fell into what is known as the “Great Disorder” and the “Great Depression” after its defeat in World War I and its failed attempt to create a democratic system in the Weimar period. The deep turmoil translates into serious shortcomings in data sources and therefore challenges analyzing the financial and monetary history of that period. While economic historians have provided thorough quantitative studies of the financial system during the pre-WWI Kaiserreich and the post-WWII Wirtschaftswunder, they have only just begun to scratch the surface of the interwar years. Yet the Great Disorder and the Great Depression remains a defining and transformational epoch in the history of both Germany and the world.

This project aims at filling a major gap in Germany’s financial history. The project is ambitious as it aims at completing a comprehensive stock market database for the interwar period, supplemented by key corporate financial variables. This database, already well underway—completed for the 1920s on a daily basis—will allow researchers to address important questions not only from a historical perspective but also from a modern finance one. This study and the data collection (now the 1930-1940 as well as key Financial variables) involved will offer novel insights into the impact of the Great Depression in Germany, the role of severe political uncertainty, and the effects of changes in corporate and financial law.

The topic of this project is to develop and analyze German stock market historical data during the Great Depression to tackle underexplored questions on microstructure and asset pricing. Given the fact that Germany at that time did had both a very developed capital market and also an advanced regulatory framework, the data set will help answer key questions (e.g. on asset pricing) but also allows for projects with significant spillovers for current policy debates (e.g. on the capital market union). These historical data will analyze the microstructure of the Berlin market during the Great Depression.