Real Shock, Monetary Aftershock: The San Francisco Earthquake and the Panic of 1907
AbstractEconomists have long studied the relationship between the real and monetary sectors. We examine the macroeconomic effects of the 1906 San Francisco earthquake, a shock that immediately reduced United States. GNP by 1.5-1.8 percentage points. The quake's impact manifested itself in gold flows, as British insurance companies paid their San Francisco claims out of home funds in the fall of 1906. The capital outflow prompted the Bank of England to raise interest rates and discriminate against American finance bills. British bank policy pushed the US into recession and set the stage for the 1907 financial crisis. The 1907 panic led to the formation of the National Monetary Commission whose proposals recommended the creation of the Federal Reserve. In this study, we identify the San Francisco earthquake as the shock that triggered the chain of events that culminated in the panic of 1907.
Download InfoIf 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.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9176.
Date of creation: Sep 2002
Date of revision:
Publication status: published as Odell, Kerry A. and Marc D. Weidenmier. "Real Shock, Monetary Aftershock: The 1906 San Francisco Earthquake And The Panic Of 1907," Journal of Economic History, 2004, v64(4,Dec), 1002-1027.
Note: DAE ME
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Find related papers by JEL classification:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-09-21 (All new papers)
- NEP-CBA-2002-09-21 (Central Banking)
- NEP-PKE-2002-09-21 (Post Keynesian Economics)
- NEP-RMG-2002-09-21 (Risk Management)
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.:
- Neal, Larry, 2000.
"A Shocking View of Economic History,"
The Journal of Economic History,
Cambridge University Press, vol. 60(02), pages 317-334, June.
- Barro, Robert J, 1979. "Money and the Price Level under the Gold Standard," Economic Journal, Royal Economic Society, vol. 89(353), pages 13-33, March.
- Tallman, Ellis & Moen, Jon, 1998.
"Gold Shocks, Liquidity, and the United States Economy during the National Banking Era,"
Explorations in Economic History,
Elsevier, vol. 35(4), pages 381-404, October.
- Ellis W. Tallman & Jon R. Moen, 1993. "Liquidity shocks and financial crises during the national banking era," Working Paper 93-10, Federal Reserve Bank of Atlanta.
- Canova, Fabio, 1991. "The Sources of Financial Crisis: Pre- and Post-Fed Evidence," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(3), pages 689-713, August.
- James H. Stock & Mark W. Watson, 2001. "Vector Autoregressions," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 101-115, Fall.
- Michael D. Bordo & Antu P. Murshid, 2000. "Are Financial Crises Becoming Increasingly More Contagious? What is the Historical Evidence on Contagion?," NBER Working Papers 7900, National Bureau of Economic Research, Inc.
- Charles W. Calomiris & Gary Gorton, 1991.
"The Origins of Banking Panics: Models, Facts, and Bank Regulation,"
in: Financial Markets and Financial Crises, pages 109-174
National Bureau of Economic Research, Inc.
- Charles W. Calomiris & Gary Gorton, . "The Origins of Banking Panics: Models, Facts, and Bank Regulation," Rodney L. White Center for Financial Research Working Papers 11-90, Wharton School Rodney L. White Center for Financial Research.
- Eric Hilt, 2009. "Wall Street's First Corporate Governance Crisis: The Panic of 1826," NBER Working Papers 14892, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.