Identifying the Effects of Bank Failures from a Natural Experiment in Mississippi during the Great Depression
- (pp. 81-101)
Abstract
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)Citation
Ziebarth, Nicolas L. 2013. "Identifying the Effects of Bank Failures from a Natural Experiment in Mississippi during the Great Depression." American Economic Journal: Macroeconomics, 5 (1): 81-101. DOI: 10.1257/mac.5.1.81Additional Materials
JEL Classification
- E32 Business Fluctuations; Cycles
- E44 Financial Markets and the Macroeconomy
- G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
- G33 Bankruptcy; Liquidation
- N12 Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: U.S.; Canada: 1913-
- N22 Economic History: Financial Markets and Institutions: U.S.; Canada: 1913-
- N92 Regional and Urban History: U.S.; Canada: 1913-
There are no comments for this article.
Login to Comment