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

Kenny, Sean LU ; Lennard, Jason LU and Turner, John (2021) In Explorations in Economic History 79(January).
Abstract
This paper analyses the macroeconomic effects of banking crises in the United Kingdom between 1750 and 1938. We construct a new annual chronology of banking crises, which we define as episodes of runs and panics combined with significant, geographically-dispersed failures and suspensions. Using a vector autoregression, we find that banking crises are associated with short, sharp and significant drops in economic growth. Using the narrative record to identify plausibly exogenous variation, we show that this finding is robust to potential endogeneity.
Please use this url to cite or link to this publication:
author
; and
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
banking crisis, macroeconomy, narrative identification, vector autoregression, United Kingdom
in
Explorations in Economic History
volume
79
issue
January
pages
18 pages
publisher
Elsevier
external identifiers
  • scopus:85090313498
ISSN
0014-4983
DOI
10.1016/j.eeh.2020.101357
language
English
LU publication?
yes
id
7f13c381-ed4f-45c5-a92a-141094f38483
date added to LUP
2020-08-21 10:18:21
date last changed
2022-04-19 00:18:23
@article{7f13c381-ed4f-45c5-a92a-141094f38483,
  abstract     = {{This paper analyses the macroeconomic effects of banking crises in the United Kingdom between 1750 and 1938. We construct a new annual chronology of banking crises, which we define as episodes of runs and panics combined with significant, geographically-dispersed failures and suspensions. Using a vector autoregression, we find that banking crises are associated with short, sharp and significant drops in economic growth. Using the narrative record to identify plausibly exogenous variation, we show that this finding is robust to potential endogeneity.}},
  author       = {{Kenny, Sean and Lennard, Jason and Turner, John}},
  issn         = {{0014-4983}},
  keywords     = {{banking crisis; macroeconomy; narrative identification; vector autoregression; United Kingdom}},
  language     = {{eng}},
  month        = {{01}},
  number       = {{January}},
  publisher    = {{Elsevier}},
  series       = {{Explorations in Economic History}},
  title        = {{The Macroeconomic Effects of Banking Crises: Evidence from the United Kingdom, 1750–1938}},
  url          = {{http://dx.doi.org/10.1016/j.eeh.2020.101357}},
  doi          = {{10.1016/j.eeh.2020.101357}},
  volume       = {{79}},
  year         = {{2021}},
}