| 讲座简介： | How does policy risk affect financial markets? To investigate this question, we study the 1930s Chinese silver crisis and construct a novel dataset of high-frequency financial data and newspaper sentiment data. We show that U.S. silver purchases propelled financial events in China, but not in the ways commonly described by the extant literature. Specifically, we argue that China’s silver policy risk triggered massive silver outflows that induced a severe credit crunch and further weakened the government’s perceived commitment to the silver standard. In turn, such weakened perceived commitment made the silver standard unsustainable. Notably, a contemporaneous comparison with Hong Kong reveals that rising global silver prices did not cause persistent silver outflows or a credit crunch in the absence of silver policy risk. These findings add to the growing body of research on economic policy risk and underscore the crucial role of policy risk in shaping economic outcomes. |
