The Political Economy of Financial Regulation: Evidence from U.S. State Usury Laws in the 19th Century

We have benefitted from the suggestions and comments of Alberto Alesina, Michael Bordo, Mark Flannery, Claudia Goldin, Richard Grossman, Sam Peltzman, Raghu Rajan, Joshua Rauh, Antoinette Schoar, Andrei Shleifer, Jeremy Stein, Amir Sufi, Luigi Zingales, Howard Bodenhorn, Peter Temin, and seminar participants at the 2007 AFA meetings in Chicago, Cornell, Dartmouth, Harvard Economics, the NBER Corporate Finance meeting, the NBER Political Economy meeting, Boston University, Northwestern, The University of Chicago, The University of Texas (Austin), the 2006 Conference on Bank Structure and Competition at the Federal Reserve Bank of Chicago, UCLA, and Washington University. We thank Matthew Gentzkow for providing historical newspaper circulation data. Anda Borden, Brian Melzer, and Roni Kisin provided excellent research assistance. Moskowitz thanks the Center for Research in Security Prices and the Neubauer Family Faculty Fellowship for financial support. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.