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Credit Crises, Money and Contractions: an historical view

Michael Bordo () and Joseph Haubrich ()

No 15389, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The relatively infrequent nature of major credit distress events makes an historical approach particularly useful. Using a combination of historical narrative and econometric techniques, we identify major periods of credit distress from 1875 to 2007, examine the extent to which credit distress arises as part of the transmission of monetary policy, and document the subsequent effect on output. Using turning points defined by the Harding-Pagan algorithm, we identify and compare the timing, duration, amplitude and co-movement of cycles in money, credit and output. Regressions show that financial distress events exacerbate business cycle downturns both in the nineteenth and twentieth centuries and that a confluence of such events makes recessions even worse.

JEL-codes: E32 E50 G21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-his and nep-mac
Date: 2009-09
Note: DAE IFM
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Published as Bordo, Michael D. & Haubrich, Joseph G., 2010. "Credit crises, money and contractions: An historical view," Journal of Monetary Economics, Elsevier, vol. 57(1), pages 1-18, January.

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Journal Article: Credit crises, money and contractions: An historical view (2010) Downloads
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