The Highs and the Lows : Bank failures in Sweden through inflation and deflation, 1914-1926
This paper revisits the Swedish banking crisis (1919–1926) that materialized as post-war deflation replaced wartime inflation (1914–1918). Inspired by Fisher’s “debt deflation theory,” we employ survival analysis to “predict” which banks would fail, given certain exante bank characteristics. Our tests support the theory; maturity structures mattered most in a regime of falling prices, with vulnera