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Network Contagion and Interbank Amplification during the Great Depression

Kris James Mitchener and Gary Richardson

No 16-3, Working Paper from Federal Reserve Bank of Richmond

Abstract: Interbank networks amplified the contraction in lending during the Great Depression. Banking panics induced banks in the hinterland to withdraw interbank deposits from Federal Reserve member banks located in reserve and central reserve cities. These correspondent banks responded by curtailing lending to businesses. Between the peak in the summer of 1929 and the banking holiday in the winter of 1933, interbank amplification reduced aggregate lending in the U.S. economy by an estimated 15 percent.

JEL-codes: E44 G01 G21 L14 N22 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2016-03-15
New Economics Papers: this item is included in nep-ban, nep-his, nep-mac, nep-mon and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Network Contagion and Interbank Amplification during the Great Depression (2019) Downloads
Working Paper: Network Contagion and Interbank Amplification during the Great Depression (2016) Downloads
Working Paper: Network Contagion and Interbank Amplification during the Great Depression (2016) Downloads
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