The Macroeconomic Effects of Banking Crises : Evidence from the United Kingdom, 1750-1938

• This paper investigates the macroeconomic effects of UK banking crises over the period 1750 to 1938. We construct a new annual banking crisis series using bank failure rate data, which suggests that the incidence of banking crises was every 32 years. Using our new series and a narrative approach to identify exogenous banking crises, we find that industrial production contracts by 8.2 per cent in the year following a crisis. This finding is robust to a battery of checks, including different VAR specifications, different thresholds for the crisis indicator, and the use of a capital-weighted bank failure rate.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Ekonomisk historia (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economic History (hsv//eng)

Nyckelord

banking crisis

bank failures

narrative approach

macroeconomy

United Kingdom

E32

E44

G21

N13

N14

N23

N24

Publikations- och innehållstyp

ovr (ämneskategori)

vet (ämneskategori)