Banks and the Economy: Evidence from the Irish Bank Strike of 1966

Jason Lennard, Kenny, Seán and Emma Horgan

No 18711, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper studies a natural experiment in macroeconomic history: the Irish bank strike of 1966, which led to the closure of the major commercial banks for three months. We use synthetic control to estimate how the economy would have evolved had the strike not happened. We find that economic activity slowed, deviating by 6% from the counterfactual path. Narrative evidence not only supports this finding, but also depicts the struggles of households and firms managing a credit crunch, a liquidity shock, and rising transaction costs. This case study highlights the importance of banks for economic performance.

Keywords: Banks; Ireland (search for similar items in EconPapers)
JEL-codes: E32 E44 G21 N14 N24 (search for similar items in EconPapers)
Date: 2023-12
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Related works:
Working Paper: Banks and the Economy: Evidence from the Irish Bank Strike of 1966 (2024)
Working Paper: Banks and the Economy: Evidence from the Irish Bank Strike of 1966 (2023)
Working Paper: Banks and the economy: Evidence from the Irish bank strike of 1966 (2023)
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