Bank Failures and Output During the Great Depression / Jeffrey A. Miron, Natalia Rigol.

Format:

Book

Author/Creator:

Miron, Jeffrey A.

Contributor:

National Bureau of Economic Research.

Rigol, Natalia.

Series:

Working Paper Series (National Bureau of Economic Research) no. w19418.

NBER working paper series no. w19418

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2013.

Summary:

In response to the Financial Crisis of 2008, macroeconomic policymakers employed a range of tools designed to prevent failures of large, complex financial institutions ("banks"). The Treasury and the Fed justified these actions by arguing that bank failures exacerbate output declines, rather than just reflecting output losses that have already occurred. This view is consistent with economic models based on credit market imperfections, but it is an empirical question as to whether the feedback from failures to output losses is substantial.

This paper examines the relation between bank failures and output by re-considering Bernanke's (1983) analysis of the Great Depression. We find little indication that bank failures exerted a substantial or sustained impact on output during this period.

Notes:

Print version record

September 2013.