Advanced Search
MyIDEAS: Login

THE EFFECT OF CHANGES IN RESERVE REQUIREMENTS DURING THE 1930s:

Contents:

Author Info

  • Thomas Mayer
  • Thomas F. Cargill

    (Department of Economics, University of California Davis)

Registered author(s):

    Abstract

    The differential response of cash reserves of member banks and nonmember banks not subject to the 1936-37 increase in reserve requirements is estimated to determine whether the 1937-38 recession was caused by the increase in reserve requirements. We identify 17 states that maintained constant reserve requirements from June 1934 to June 1941. While member banks increased their cash reserve ratios relative to nonmember banks, the magnitude of the adjustment is too small to have contributed to the 1937-38 recession. Shock prices and public reaction to the increase in reserve requirements are consistent with the empirical results. While the Fed was responsible for the Great Contraction, the results are inconsistent with the view the Fed’s reserve requirement increase contributed significantly to the 1937-38 recession.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://wp.econ.ucdavis.edu/03-10.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by University of California, Davis, Department of Economics in its series Working Papers with number 310.

    as in new window
    Length: 33
    Date of creation: 13 Jan 2004
    Date of revision:
    Handle: RePEc:cda:wpaper:03-10

    Contact details of provider:
    Postal: One Shields Ave., Davis, CA 95616-8578
    Phone: (530) 752-0741
    Fax: (530) 752-9382
    Email:
    Web page: http://www.econ.ucdavis.edu
    More information through EDIRC

    Related research

    Keywords: excess reserves; Federal Reserve; Great Depression; reserve requirements; 1937-38;

    Find related papers by JEL classification:

    References

    References listed on IDEAS
    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.:
    as in new window
    1. Karl Brunner & Allan H. Meltzer, 1968. "Liquidity Traps for Money, Bank Credit, and Interest Rates," Journal of Political Economy, University of Chicago Press, vol. 76, pages 1.
    2. Clifford B. Sowell & Atul K. Saxena, 2000. "An Examination of Country Member Bank Cash Balances of the 1930s: A Test of Alternative Explanations," Southern Economic Journal, Southern Economic Association, vol. 66(4), pages 923-941, April.
    3. 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.
    4. Charles W. Calomiris & Joseph R. Mason, 2003. "Consequences of Bank Distress During the Great Depression," American Economic Review, American Economic Association, vol. 93(3), pages 937-947, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:cda:wpaper:03-10

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Scott Dyer).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.