NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Monetary Intervention Mitigated Banking Panics During the Great Depression: Quasi-Experimental Evidence from the Federal Reserve District Border in Mississippi, 1929 to 1933

Gary Richardson, William Troost

NBER Working Paper No. 12591
Issued in October 2006
NBER Program(s):   DAE   ME

The Federal Reserve Act of 1913 divided Mississippi between the 6th (Atlanta) and 8th (St. Louis) Federal Reserve Districts. Before and during the Great Depression, these districts' policies differed. The Atlanta Fed championed monetary activism and the extension of credit to troubled banks. The St. Louis Fed adhered to the doctrine of real bills and eschewed expansionary initiatives. Outcomes differed across districts. In the 6th District, banks failed at lower rates than in the 8th District, particularly during the banking panic in the fall of 1930. The pattern suggests that discount lending reduced failure rates during periods of panic. Historical evidence and statistical analysis corroborates this conclusion.

download in pdf format
   (461 K)

email paper

This paper is available as PDF (461 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w12591

Published: Richardson, Gary and William Troost. "Monetary Intervention Mitigated Banking Panics During the Great Depression: Quasi-Experimental Evidence from the Federal Reserve District Border in Mississippi, 1929 to 1933." Journal of Political Economy 117, 6 (2009): 1031-1073.

Users who downloaded this paper also downloaded these:
Bernanke w1054 Non-Monetary Effects of the Financial Crisis in the Propagation of the Great Depression
Hsieh and Romer w8113 Was the Federal Reserve Fettered? Devaluation Expectations in the 1932 Monetary Expansion
Bernanke w4814 The Macroeconomics of the Great Depression: A Comparative Approach
Bernanke and James w3488 The Gold Standard, Deflation, and Financial Crisis in the Great Depression: An International Comparison
Romer w2639 The Great Crash and the Onset of the Great Depression
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us