Abstract
In this study we analyze two different ways of describing historical events and how they were perceived by contemporary actors. The first way is the historians' ex post analysis as represented in modern historical writing. The second way is the ex ante assessments of contemporary actors as reflected in financial price data collected from the time period in question. Specifically, we estimate structural breaks in government bond prices of the Nordic countries and Germany around World War II and contrast them with the events that historians claim were viewed as important by that period's contemporaries. We find large differences between the outputs of the two methods. For example, whereas historians describe the Scandinavians as feeling safe from the threat of war until a very late stage, the bond prices produce significant breaks signaling the opposite at a quite early stage. From a methodological point of view, we also introduce a systematic distinction between sudden and gradual structural breaks which provides an intuitive way of capturing peoples' responses to major political events.