I really never understood why most economists study so little economic history as they tend to do, but it is a fact that most professional economists are quite uneducated when it comes to economic history.
My contribution to changing that is sharing research on economic history with my readers. So take a look at this new paper by Olivier Accominotti and Barry Eichengreen on “The Mother of All Sudden Stops: Capital Flows and Reversals in Europe, 1919-1932″.
Here is the abstract:
We present new data documenting European capital issues in major financial centers from 1919 to 1932. Push factors (conditions in international capital markets) perform better than pull factors (conditions in the borrowing countries) in explaining the surge and reversal in capital flows. In particular, the sharp increase in stock market volatility in the major financial centers at the end of the 1920s figured importantly in the decline in foreign lending. We draw parallels with Europe today.
A couple of days ago I argued that David Laidler should be awarded the Nobel Prize in economics, but if it is award to Barry Eichengreen for his contribution to “the understanding of economic history” I think it would be well-deserved!
The Market Monetarist 
John S
/ October 11, 2013I like Eichengreen, but I don’t get why knowledgeable scholars like he and Perry Mehrling say nothing about free banking in Canada or Scotland or non-central bank alternatives for fixing the flaws of the pre-Fed US banking system. At least Bordo gives free banking a fair hearing, and he certainly understands how it works.
Example: Here Eichengreen starts off with a caricature of a gold standard (paying for gas with a gold coin!), and then describes a gold standard as “price fixing” (when really it is a definition). He mentions everything “Austrian” in this article (ABCT, 100% reserves, Hayek’s competing currencies) *except* free banking–the one system we know for sure worked successfully!
http://nationalinterest.org/article/critique-pure-gold-5741
Like Kurt Schuler said, a specie standard is not compatible with a central bank. Most of the problems of the Great Depression, as far as I can tell, would have been far milder under a free banking specie standard. Why does this argument get no attention from economic historians?