The outcome signify financial downfalls remove next monetary progress

Wrote as: Kupiec, Paul H. and you can Carlos D. Ramirez. « Bank Failures and also the Price of General Exposure: Facts away from 1900-1930. » Diary out-of Financial Intermediation twenty two, no. step three (2013): 285-307.

Which papers talks about the end result of bank failures toward monetary growth playing with research out of 1900 to help you 1930, an occasion that predates energetic government stabilizing principles and you may boasts symptoms out-of bank operating system worry which aren’t coincident having recessions. Using both VAR and a distinction-in-differences methodology you to definitely exploits the brand new reactions of one’s Ny and you will Connecticut economies into the Stress out of 1907, we estimate the perception regarding bank disappointments on financial hobby. More this era, an excellent 0.twelve percent (step one fundamental departure) upsurge in the brand new liabilities of the were not successful depository associations leads to a decrease in 17 percentage issues throughout the rate of growth from commercial manufacturing and you may a great cuatro commission point reduction in actual GNP growth.