Real Effects of Supplying Safe Private Money

First version: November, 2018. Previously circulated as “National banks and the local economy.” The authors thank Adrien Matray for numerous discussions. Philip Ager, Rick Hornbeck, and Martin Rotemberg generously shared data. We also thank Anat Admati, Brian Beach, Asaf Bernstein, Michael Bordo, John Campbell, Lauren Cohen, William Diamond, James Feigenbaum, Carola Frydman, Andrew Garin, Michela Giorcelli, Claudia Goldin, Gary Gorton, Walker Hanlon, Arvind Krishnamurthy, Christopher M. Meissner, Nathan Nunn, Siddharth George, Robin Greenwood, Alberto Manconi, Santiago Perez, Sarah Quincy, Tzachi Raz, Hugh Rockoff, Amit Seru, Jann Spiess, Jeremy Stein, Adi Sunderam, as well as participants at Harvard, Yale, UC Davis, Einaudi Institute, HKUST, NBER DAE, EHA, the AEAs, and Stanford SITE for helpful comments. Jiayi Cheng, William Halverson, Peilin Yang, and Wenyi Yin provided excellent research assistance. We are grateful for financial support from The Lab for Economic Applications and Policy (LEAP) at Harvard, the Harvard Department of Economics Summer Research Fellowship, and the King Center Junior Faculty Research Grant at the Stanford. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.

• May 18, 2022