Contagion of Fear

Kris James Mitchener and Gary Richardson

No 26859, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The Great Depression is infamous for banking panics, which were a symptomatic of a phenomenon that scholars have labeled a contagion of fear. Using geocoded, microdata on bank distress, we develop metrics that illuminate the incidence of these events and how banks that remained in operation after panics responded. We show that between 1929-32 banking panics reduced lending by 13%, relative to its 1929 value, and the money multiplier and money supply by 36%. The banking panics, in other words, caused about 41% of the decline in bank lending and about nine-tenths of the decline in the money multiplier during the Great Depression.

JEL-codes: E44 G01 G21 N22 (search for similar items in EconPapers)
Date: 2020-03
New Economics Papers: this item is included in nep-his and nep-mac
Note: DAE ME
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w26859.pdf (application/pdf)

Related works:
Working Paper: Contagion of Fear (2020)
Working Paper: Contagion of Fear (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:26859

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w26859

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().