Munich Personal RePEc Archive

Money and Overseas Investments in the Relative Fall of British Empire

Rota, Mauro and Schettino, Francesco (2007): Money and Overseas Investments in the Relative Fall of British Empire.

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Abstract

Investigating on the reasons of British overseas investments (1850-1913) we analyze two different approaches on data and we conclude that they are not different from a stochastic view. Inquiring on ‘push’ approach, we find that exists a negative correlation between GDP and overseas investments where the former cause the latter. The link between monetary events and colonialism highlights India’s role as a reserve of bullions. In this way, British capital was able to complete its natural cycle, draining money for future foreign investments. This improve the theory by introducing the monetary element in ‘push’ and ‘pull’ hypothesis as well.

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