The Effect of Changes in Reserve Requirements During the 1930s: The Evidence from Nonmember Banks
AbstractDespite the widespread acceptance of Friedman and Schwartz s interpretation of the 1936 37 increase in member bank reserve requirements as the major cause of the 1937 38 recession there is surprisingly little straightforward evidence on this issue, perhaps because data limitations and structural instability preclude econometric modeling. We exploit a simple alternative, comparing member banks with nonmember banks not subject to changes in reserve requirements. The results support the hypothesis that the increase in reserve requirements reduced the availability of bank credit and contributed to the recession.
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Bibliographic InfoArticle provided by Cambridge University Press in its journal The Journal of Economic History.
Volume (Year): 66 (2006)
Issue (Month): 02 (June)
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Other versions of this item:
- Cargill, Thomas & Mayer, Thomas, 2005. "The Effect of Changes in Reserve Requirements during the 1930s: The Evidence from Nonmember Banks," Working Papers 03-10, University of California at Davis, Department of Economics.
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
- N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mayer, Thomas, 1978. "Money and the Great Depression: A critique of professor Temin's thesis," Explorations in Economic History, Elsevier, vol. 15(2), pages 127-145, April.
- Alberto M. Ramos, 1996. "Bank capital structures and the demand for liquid assets," Proceedings 519, Federal Reserve Bank of Chicago.
- Charles W. Calomiris & Joseph R. Mason & David C. Wheelock, 2011.
"Did doubling reserve requirements cause the recession of 1937-1938? a microeconomic approach,"
2011-002, Federal Reserve Bank of St. Louis.
- Charles W. Calomiris & Joseph Mason & David Wheelock, 2011. "Did Doubling Reserve Requirements Cause the Recession of 1937-1938? A Microeconomic Approach," NBER Working Papers 16688, National Bureau of Economic Research, Inc.
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