PhD Chapters

Chapter 1: Hyperinflation and Stabilisation in Poland, 1919-1927: ‘War of Attrition’ or Politics by Other Means?

This chapter uses daily-frequency exchange-rate data to investigate the Polish hyperinflation after World War I, a formative episode that accounts for many of the institutions and political choices that shaped Poland’s trajectory during the Great Depression. My main finding is that the Polish hyperinflation was driven by low state capacity and foreign-policy events, not distributional conflict as argued by Alesina and Drazen (1991) and Eichengreen (1995). The timing of the stabilisation clearly substantiates Sargent’s (1981) hypothesis that rational, not adaptive, expectations governed the Polish hyperinflation.

Chapter 2: Sovereign Debt and the Great Depression in Central Europe: Evidence from Transatlantic Bond Markets

I make use of a set of 43,111 sovereign-bond quotations collected at daily frequency for all of the sovereign securities of Poland, Austria, Germany and Hungary listed on the London and New York bond markets between 1927 and 1936 to analyse the propagation of the 1931 crisis throughout Central Europe and shed light on why Poland did not follow Germany off gold, despite having a higher sovereign debt/GDP ratio. I find that, while the Central European debtors suffered a common shock from investor confidence in September 1931, Polish bonds recovered quickly, as Poland’s authoritarian government signaled its willingness to do everything necessary to keep Poland strategically aligned with France in the Gold Bloc.

Chapter 3: Interwar Poland’s Late Exit from Gold: A Case of Government as ‘Conservative Central Banker’

This paper uses high-frequency (thrice-monthly) balance-sheet data from the Bank of Poland, as well as archival evidence from the Bank’s files, to examine in detail why Poland stayed on gold until 1936 and why it was not forced off earlier.  My most important finding is that Poland during the Great Depression provides a counterexample to Rogoff’s (1985) argument that delegation of monetary policy to an actor without a social mandate to stabilise output will lead to tighter policy.  The evidence shows that, from the 1931 crisis onward, the Bank’s desire to devalue the Zloty was being held in check by the government’s geopolitically motivated determination to maintain convertibility, made effective by a de facto takeover of the Bank by the government.  Poland’s exit from gold in 1936 is directly attributable to foreign policy events (Hitler’s Rhineland coup being one), which undermined the value of the French alliance: there is no evidence of the decision being forced by a drop in reserves, as the traditional Polish historiography alleges.

MSc Thesis: Monetary Regime Change and the End of the Great Depression in Poland, 1934-1936

The key contribution of my MSc thesis, written as a prelude to my current PhD work, was to provide a badly needed reinterpretation of the existing historiography on the Great Depression in Poland – most of it written behind the Iron Curtain in the 1960s and 1970s – in the light of modern macroeconomic theory. It is narrative rather than quantitative in focus, but serves as an accessible primer on the course of the Depression in Poland.


Shorter Writing

Brexit Lessons from the ‘Silesian Backstop’ of 1919 – 1925. LSE BREXIT Blog, 15 April 2019.