TY  - JOUR
AU  - Bordo,Michael D.
AU  - Haubrich,Joseph G.
TI  - Credit Crises, Money and Contractions: an historical view
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15389
PY  - 2009
Y2  - September 2009
UR  - http://www.nber.org/papers/w15389
L1  - http://www.nber.org/papers/w15389.pdf
N1  - Author contact info:
Michael D. Bordo
Department of Economics
Rutgers University
New Jersey Hall
75 Hamilton Street
New Brunswick, NJ 08901
Tel: 732/822-7152
Fax: 732/932-7416
E-Mail: bordo@econ.rutgers.edu

Joseph G. Haubrich
Federal Reserve Bank ofCleveland
1455 East 6th Street
Cleveland, Ohio 44114
Tel: 216/579-2000
E-Mail: jhaubrich@clev.frb.org
AB  - The relatively infrequent nature of major credit distress events makes an historical approach particularly useful. Using a combination of historical narrative and econometric techniques, we identify major periods of credit distress from 1875 to 2007, examine the extent to which credit distress arises as part of the transmission of monetary policy, and document the subsequent effect on output. Using turning points defined by the Harding-Pagan algorithm, we identify and compare the timing, duration, amplitude and co-movement of cycles in money, credit and output. Regressions show that financial distress events exacerbate business cycle downturns both in the nineteenth and twentieth centuries and that a confluence of such events makes recessions even worse.
ER  -