scholarly journals Identifying the Effects of Bank Failures from a Natural Experiment in Mississippi during the Great Depression

2013 ◽  
Vol 5 (1) ◽  
pp. 81-101 ◽  
Author(s):  
Nicolas L Ziebarth
Keyword(s):  
Great Depression ◽  
Causal Effect ◽  
Bank Failures ◽  
Liquidity Provision ◽  
The Great Depression ◽  
Negative Effect ◽  
Quasi Experimental ◽  
Plant Level ◽  
Physical Output ◽  
Large Decline

I examine the causal effect of bank failures during the Great Depression using the quasi-experimental setup of Richardson and Troost (2009). The experiment is based on Mississippi being divided into two Federal Reserve districts, which followed different policies for liquidity provision. This translated into variation in bank failures across the state. Employing a plant-level sample from the Census of Manufactures, I find that banking failures had a negative effect on revenue stemming from a fall in physical output. I find no effect on employment at the plant-level and a large decline at the county-level. (JEL E32, E44, G21, G33, N12, N22, N92)

Bank Failures, The Great Depression, and Other “Contagious” Events

2019 ◽  
pp. 909-927
Author(s):  
Charles W. Calomiris
Keyword(s):  
Public Policy ◽  
Great Depression ◽  
Deposit Insurance ◽  
Policy Implications ◽  
Bank Failures ◽  
Historical Evidence ◽  
Lender Of Last Resort ◽  
Safety Nets ◽  
The Public ◽  
The Great Depression

Deposit withdrawal pressures on banks, which sometimes take the form of sudden runs, have figured prominently in the discussion of public policy toward banks and the construction of safety nets such as deposit insurance and the lender of last resort. This chapter examines historical evidence from the Great Depression, and other episodes, on the factors that prompted withdrawals, the discussion of contagious runs, and the public policy implications. The historical evidence is presented in detail and is connected to the debate over the proper roles of deposit market discipline via the threat of withdrawals, the insurance of deposits, and lender-of-last-resort support for banks facing withdrawal pressures.

scholarly journals How Much Does Political Uncertainty Matter? The Case of Louisiana under Huey Long

2017 ◽  
Vol 77 (1) ◽  
pp. 90-126 ◽  
Author(s):  
Gabriel Mathy ◽  
Nicolas L. Ziebarth
Keyword(s):  
Great Depression ◽  
Stock Price ◽  
Price Volatility ◽  
The State ◽  
Primary Sources ◽  
Control Group ◽  
Political Uncertainty ◽  
The Great Depression ◽  
Negative Effect ◽  
Employment Data

We study the effect of political uncertainty on economic outcomes using the case of Huey Long's tenure as governor and senator of Louisiana during the Great Depression. Based on primary sources, we construct two well-established measures of uncertainty specifically for Louisiana: stock price volatility and newspaper mentions of terms related to “uncertainty” and the economy. Combining these uncertainty measures with employment data from the Census of Manufactures, we attempt to identify the effects of political uncertainty using the state of Mississippi as a control group. We find little support for a negative effect from political uncertainty in Huey Long's Louisiana.

scholarly journals Banking crises and the international monetary system in the Great Depression and now

2011 ◽  
Vol 18 (1) ◽  
pp. 1-20 ◽  
Author(s):  
Richhild Moessner ◽  
William A. Allen
Keyword(s):  
Great Depression ◽  
International Monetary System ◽  
Banking Crises ◽  
Flexible Exchange Rate ◽  
Short Term ◽  
Liquidity Provision ◽  
The Great Depression ◽  
Monetary System ◽  
Bank Deposits ◽  
Rate Environment

We identify similarities and differences in the scale and nature of the banking crises in 2008-9 and the Great Depression, and analyse differences in the policy response to the two crises in light of the prevailing international monetary systems. We find that the scale of the banking crisis, as measured by falls in international short-term indebtedness and total bank deposits, was smaller in 2008-9 than in 1931. However, central bank liquidity provision was larger in the flexible exchange rate environment of 2008-9 than in 1931, when it had been constrained in many countries by the gold standard.

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