The Macroeconomic Effects of Banking Crises: Evidence from the United Kingdom, 1750-1938

Seán Kenny, Jason Lennard, John D. Turner

Research output: Working paper/PreprintWorking paper

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Abstract

This paper investigates the macroeconomic effects of UK banking crises over the period 1750 to 1938. We construct a new annual banking crisis series using bank failure rate data, which suggests that the incidence of banking crises was every 32 years. Using our new series and a narrative approach to identify exogenous banking crises, we find that industrial production contracts by 8.2 per cent in the year following a crisis. This finding is robust to a battery of checks, including different VAR specifications, different thresholds for the crisis indicator, and the use of a capital-weighted bank failure rate.
Original languageEnglish
Place of PublicationLund
PublisherDepartment of Economic History, Lund University
Number of pages47
Publication statusPublished - 2017

Publication series

NameLund Papers in Economic History: General Issues
PublisherDepartment of Economic History, Lund Universirt
No.165
ISSN (Print)1101-346X

Subject classification (UKÄ)

  • Economic History

Free keywords

  • banking crisis
  • bank failures
  • narrative approach
  • macroeconomy
  • United Kingdom
  • E32
  • E44
  • G21
  • N13
  • N14
  • N23
  • N24

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