The macroeconomic effects of banking crises: evidence from the United Kingdom, 1750–1938

Kenny, Seán, Lennard, Jason ORCID: 0000-0002-6700-8969 and Turner, John D. (2021) The macroeconomic effects of banking crises: evidence from the United Kingdom, 1750–1938. Explorations in Economic History, 79. ISSN 0014-4983

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Abstract

This paper analyses the macroeconomic effects of banking crises in the United Kingdom between 1750 and 1938. We construct a new annual chronology of banking crises, which we define as episodes of runs and panics combined with significant, geographically-dispersed failures and suspensions. Using a vector autoregression, we find that banking crises are associated with short, sharp and significant drops in economic growth. Using the narrative record to identify plausibly exogenous variation, we show that this finding is robust to potential endogeneity.

Item Type:	Article
Official URL:	https://www.sciencedirect.com/journal/explorations...
Additional Information:	© 2020 The Authors
Divisions:	Economic History
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HG Finance
JEL classification:	E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations; Cycles E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E44 - Financial Markets and the Macroeconomy G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages N - Economic History > N1 - Macroeconomics and Monetary Economics; Growth and Fluctuations > N13 - Europe: Pre-1913 N - Economic History > N1 - Macroeconomics and Monetary Economics; Growth and Fluctuations > N14 - Europe: 1913- N - Economic History > N2 - Financial Markets and Institutions > N23 - Europe: Pre-1913 N - Economic History > N2 - Financial Markets and Institutions > N24 - Europe: 1913-
Date Deposited:	17 Sep 2020 14:21
Last Modified:	17 Apr 2024 02:00
URI:	http://eprints.lse.ac.uk/id/eprint/106585

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