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The winding up of the Ayr Bank, 1772-1816




The collapse of the experimental Ayr Bank was the central episode of the 1772-3 credit crisis, and is used as a prominent example in Adam Smith's monetary analysis in the Wealth of Nations. Subsequent literature on the affair has been overly influenced by a small number of printed sources, and has propagated their biases. This article uses previously unpublished manuscript evidence to reconstruct and extend the existing narrative of this famous episode, and identifies the issuance of redeemable annuities in response to the bank's stop of payments in June 1772 as the main cause for the size of its losses.

Suggested Citation

  • Paul Kosmetatos, "undated". "The winding up of the Ayr Bank, 1772-1816," Working Papers 19, Department of Economic and Social History at the University of Cambridge.
  • Handle: RePEc:cmh:wpaper:19

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    References listed on IDEAS

    1. Harvey, A C, 1985. "Trends and Cycles in Macroeconomic Time Series," Journal of Business & Economic Statistics, American Statistical Association, vol. 3(3), pages 216-227, June.
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