Monetary aggregates for Ireland, 1840–1921

Abstract

Three major findings are gleaned from the data. First, we find that the degree of monetization on the eve of the Famine was comparatively high. Second, we find an unprecedented monetary contraction during the Famine. Third, in contrast to previous research, we find that the failure of the Munster Bank in 1885 had ramifications for confidence in, and the stability of, the banking system.T his article presents new monthly estimates of the narrow money supply and annual estimates of the broad money supply in Ireland between 1840 and 1921. The aggregates are constructed from a range of archival sources and contemporary publications. The period under investigation covers the Great Famine, the agricultural depressions of the late 1850s and 1870s, the failure of the Tipperary and Munster banks, and the First World War. It was also a time of rising living standards, as reflected in measures such as wages, consumption, literacy, life-span, height, and birth weight. 1 This article is partly motivated by an old debate regarding the degree to which Ireland was monetized and financially developed on the eve of the Famine. 2 It has been argued that it was underdevelopment in this regard that left the country vulnerable to exogenous shocks. The article is also motivated by the dearth of macroeconomic time series before the interwar period. A notable example here is the lack of annual national accounts. In recent years, however, new data have been constructed for the stock market, the grain trade, and the production of various goods, among others. 3 This growing body of research sheds much-needed light on the Irish economy in the nineteenth century.The new data build on earlier work by O'Rourke, who summed notes in circulation and gross deposits for this period, by adding series for coins and reserves, which varied in importance over time, as well as correcting the deposit series for adjustment items and missing banks. 4 It also contributes to the recent

Irish GDP between the Famine and the First World War: estimates based on a dynamic factor model

“…In the first stage, a dynamic factor model is estimated to identify the common movement in a set of key macroeconomic variables. The data set includes those sub-components of GDP that are available (on the expenditure, income and output sides), as well as the growing body of high-quality macroeconomic time series that are in theory correlated with GDP, such as monetary aggregates (Kenny and Lennard 2017) and share prices (Hickson and Turner 2008;Grossman et al 2014). A problem with dynamic factor models is that the resulting index is unitless.…”

“…Currency in the hands of the public(Kenny and Lennard 2017) is also included, based on the logic that monetary aggregates should be related to GDP through the quantity equation, given stable velocity. Bank notes, a large component of this aggregate, have been used in previous studies "as a good barometer of the level of economic activity" for this period in Irish history(Ó Gráda 1994, p. 178).…”

“…Data and sources Variables and units Sources and notes Population (number) Mitchell (1988). Mid year Real currency in the hands of the public (£) Nominal series from Kenny and Lennard (2017). Deflated using median cost of living index Real interest rate (%) Nominal series from Hall (1949) 2004Oxen exports 100 head1840-4: Solar (2006), 1845-1913: Solar (1987.…”

Political Economy of Secession: Lessons From the Early Years of the Irish Free State

“…14 The service sector of the Irish economy was reasonably well developed in areas such as banking and finance, postal services, transport and retail. This is particularly true in the case of the financial system which was very advanced by international standards in terms of both monetization and depth (Kenny and Lennard, 2018). The suspension of the payment of notes on demand during the war led to an As a subsequent study explained, "the only part of the island which could be said to have experienced an industrial revolution, the North east, remained part of the United Kingdom" (Kennedy et al, 1988, p. 130).…”

The Irish Land Question, the International Monetary Problem, and Archbishop William Walsh, 1881–1896

“…Gold coin did not circulate among the Irish public, who instead used silver and notes for their exchanges. 18 Hugh Rockoff's work on the nineteenth-century United States highlights that financial and agricultural shocks hit some regions harder than others. Such disparities created debates within nation-states over monetary institutions and policy.…”