The British have a history of recording excellent historical data, and we’ve already written a few related posts. Today we look at central bank assets for the Bank of England, founded in 1694. The graph above shows the assets as a share of GDP since 1701, which is a remarkable timeline, especially because it requires estimates of GDP from before the American Revolutionary War not to mention the Battle of Culloden!
This FRED graph shows us that assets in the 18th century reached a fifth of GDP before slowly receding. There were run-ups during the turmoil of the Great Depression, World War II, and the Great Recession and its financial crisis. For comparison, we added the (much shorter) corresponding series for the United States in red. It’s pretty amazing how well they match up.
How this graph was created” Search for “Bank of England assets,” select the appropriate series, and click “Add to Graph.” From the “Edit Graph” panel, open the “Add line” tab, and search for “federal reserve assets.” Once you have the series, change its frequency to quarterly, add a series looking for “nominal GDP,” and apply formula a/b/10. (We multiply by 100 to get percent but divide by 1000 to have the same units for a and b: thus, /10.)
Suggested by Christian Zimmermann.