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A Monthly Stock Exchange Index for Ireland, 1864‐1930

Author

Listed:
  • Richard S.Grossman

    (Department of Economics, Wesleyan University)

  • Ronan C. Lyons

    (Trinity College, Dublin & Balliol College, Oxford)

  • Kevin Hjortshøj O’Rourke

    (All Souls College, Oxford & CEPR & NBER & IIIS, Trinity College Dublin)

  • Madalina A. Ursu

    (London School of Economics)

Abstract
Information on the performance of equities during the latter part of the globalized long nineteenth century is scarce, particularly for smaller European economies such as Ireland. Using a dataset of over 35,000 price‐year observations from the Investor’s Monthly Manual, this paper constructs new monthly Irish stock market price indices for the period 1864-1930, encompassing periods of significant economic and political turmoil in Irish history. In addition to a total market index covering all 118 equity securities issued by 94 companies, sector-specific indices are presented for railways, financial services companies, and miscellaneous industrial and retail companies. Weighted by market capitalization, nominal equity prices were largely static in the 1860s, before increasing by almost 60% in nominal terms between 1870 and 1878. Between 1878 and 1879, equity prices fell by one sixth in the space of a year, after which there was a secular rise in equity prices for two decades, with equity prices in 1899 twice what they had been in 1864. Between the turn of the century and the outbreak of the Great War, though, prices fell by 25%, a pattern that stands in stark contrast to returns on the London exchange, which were greater during 1894-1913 than during the preceding two decades. The period from 1914 until 1929 saw a number of boom-bust cycles, concurrent with war and other political events affecting Ireland, including its independence movement. Railway equities, which had trebled between the mid-1860s and the turn of the century, fell sharply during the 1910s and 1920s. In contrast, financial equity prices – which were just 20% higher in 1920 than in 1864 – rose strongly during the 1920s. Overall, the average annual gain in equity prices over the period was just 0.9%, well below levels associated with an equity premium puzzle.

Suggested Citation

  • Richard S.Grossman & Ronan C. Lyons & Kevin Hjortshøj O’Rourke & Madalina A. Ursu, 2013. "A Monthly Stock Exchange Index for Ireland, 1864‐1930," Wesleyan Economics Working Papers 2013-007, Wesleyan University, Department of Economics.
    • Handle: RePEc:wes:weswpa:2013-007
    as

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    File URL: http://repec.wesleyan.edu/pdf/rgrossman/2013007_grossman.pdf
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    References listed on IDEAS

    as
    1. Edward Hope & Brian Lucey, 2007. "Daily seasonality in 19th century stocks -- some evidence from the Dublin stock exchange," Applied Economics Letters, Taylor & Francis Journals, vol. 14(4), pages 277-282.
    2. Robert J. Barro & Jose F. Ursua, 2008. "Macroeconomic Crises since 1870," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(1 (Spring), pages 255-350.
    Full references (including those not matched with items on IDEAS)

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. And now for something a bit more academic
      by Richard S. Grossman in Unsettled Account on 2014-01-20 08:04:35

    Citations

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    Cited by:

    1. Fredrik N G Andersson & Jason Lennard, 2019. "Irish GDP between the Famine and the First World War: estimates based on a dynamic factor model," European Review of Economic History, European Historical Economics Society, vol. 23(1), pages 50-71.
    2. Seán Kenny & Jason Lennard & Kevin Hjortshøj O'Rourke, 2023. "An annual index of Irish industrial production, 1800–1913," Economic History Review, Economic History Society, vol. 76(1), pages 283-304, February.
    3. Seán Kenny & Jason Lennard, 2018. "Monetary aggregates for Ireland, 1840–1921," Economic History Review, Economic History Society, vol. 71(4), pages 1249-1269, November.
    4. Seán Kenny & Jason Lennard & Kevin Hjortshøj O’Rourke, 2020. "An annual index of Irish industrial production, 1800-1921," Oxford Economic and Social History Working Papers _185, University of Oxford, Department of Economics.
    5. Adams, R. J. C. & Campbell, Gareth & Coyle, Christopher & Turner, John D., 2022. "The wee divergence: Business creation and political turmoil in Ireland before 1900," QUCEH Working Paper Series 22-01, Queen's University Belfast, Queen's University Centre for Economic History.
    6. Nathan Foley-Fisher & Eoin McLaughlin, 2014. "State dissolution, sovereign debt and default:Lessons from the UK and Ireland, 1920-1938," Working Papers 0061, European Historical Economics Society (EHES).
    7. Rebecca Stuart, 2022. "Stock Return Predictability before the First World War," IRENE Working Papers 22-02, IRENE Institute of Economic Research.
    8. McLaughlin, Eoin & Foley-Fisher, Nathan, 2013. "Irish Land Bonds: 1891-1938," SIRE Discussion Papers 2013-109, Scottish Institute for Research in Economics (SIRE).
    9. Rebecca Stuart, 2024. "Measuring stock market integration during the Gold Standard," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 18(1), pages 191-220, January.
    10. Foley-Fisher, Nathan & McLaughlin, Eoin, 2016. "Sovereign debt guarantees and default: Lessons from the UK and Ireland, 1920–1938," European Economic Review, Elsevier, vol. 87(C), pages 272-286.
    11. Hannah, Leslie, 2017. "The London Stock Exchange 1869-1929: new bloody statistics for old?," Economic History Working Papers 82404, London School of Economics and Political Science, Department of Economic History.
    12. Leslie Hannah, 2018. "The London Stock Exchange, 1869–1929: new statistics for old?," Economic History Review, Economic History Society, vol. 71(4), pages 1349-1356, November.

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    More about this item

    Keywords

    Irish stock exchange; Investor’s Monthly Manual; long-run stock returns; 19th Century; 20th Century; Ireland;
    All these keywords.

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
    • N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-

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