Doctoral Dissertation Research in Economics: Modern Financial Markets and Macroeconomic Growth in Historical Context

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This doctoral dissertation research improvement grant will fund data collection for a study of the relationship between between modern financial markets and macroeconomic growth. The goal is to understand the role a vigorous and competitive financial system can play in facilitating economic development. The PI will develop a new data set using historical records and will use the data to test theories about the relationship between financial markets, politics, and economic development. The results will help us understand the advantages of economic liberalization for global economic well-being.The doctoral student will focus his efforts on a specific promising case: Sichuan, China from 1933 to 1942. During this period, China made efforts to build a financial sector capable of accumulating capital and funding needed industrialization. Sichuan was China's most populous province, and the local government experimented with fiat currency and initiatives to expand the capital base of the private banking sector. The project will use archival records to construct data on Sichaun's prewar financial system, including regional interest rates, exchange rates, prices of local government debt, and balances of banknotes outstanding, as well as variables measure the political and infrastructure landscape. The team will use the data to determine the role of private enterprise in spurring the early stages of economic growth in Sichuan. The results may therefore be transformative for our understanding of the importance of economic liberalization around the globe.This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.