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

Seán Kenny, Jason Lennard () and John D. Turner

Explorations in Economic History, 2021, vol. 79, issue C

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.

Keywords: Banking crisis; Macroeconomy; Narrative identification; Vector autoregression; United Kingdom (search for similar items in EconPapers)
JEL-codes: E32 E44 G21 N13 N14 N23 N24 (search for similar items in EconPapers)
Date: 2021
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Working Paper: The macroeconomic effects of banking crises: evidence from the United Kingdom, 1750–1938 (2021) Downloads
Working Paper: The Macroeconomic Effects of Banking Crises: Evidence from the United Kingdom, 1750-1938 (2017) Downloads
Working Paper: The Macroeconomic Effects of Banking Crises: Evidence from the United Kingdom, 1750-1938 (2017) Downloads
Working Paper: The macroeconomic effects of banking crises: Evidence from the United Kingdom, 1750-1938 (2017) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:exehis:v:79:y:2021:i:c:s0014498320300528

DOI: 10.1016/j.eeh.2020.101357

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