A mirror of history: C hina's bond market, 1921–42

This article provides a quantitative assessment of contemporary beliefs about historical events by econometrically identifying ‘break points’ in C hina's domestic bond market from 1921 to 1942. We find that these ‘break points’ usually coincided with the events highlighted by the S hanghai N ewspaper —an influential daily newspaper produced during the time of the R epublic of C hina. These events are also generally considered to be crucial by historians—for example, the J apanese invasion of M anchuria and the outbreak of the S econd S ino‐ J apanese W ar. However, some events to which historians attach great importance, such as the conflicts between Nationalists and Communists in the 1930s, were not reflected in the bond market and did not attract much media attention. Some events, such as the S ino‐ J apanese ceasefire in T anggu in 1933, were thought to be crucial by contemporaries, but have been downplayed by later observers.