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Banks and the Economy : Evidence from the Irish Bank Strike of 1966

Lennard, Jason LU ; Kenny, Seán LU and Horgan, Emma (2024) In Lund Papers in Economic History
Abstract
This paper studies a natural experiment in macroeconomic history: the Irish bank strike of 1966, which led to the closure of the major commercial banks for three months. We use synthetic control to estimate how the economy would have evolved had the strike not happened. We find that economic activity slowed, deviating by 6% from the counter-factual path. Narrative evidence not only supports this finding, but also depicts the struggles of households and firms managing a credit crunch, a liquidity shock, and rising transaction costs. This case study highlights the importance of banks for economic performance.
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author
; and
organization
publishing date
type
Working paper/Preprint
publication status
published
subject
in
Lund Papers in Economic History
issue
2024:256
pages
49 pages
language
English
LU publication?
yes
id
be73554b-9f50-4295-9757-0db769bef8ab
date added to LUP
2024-01-29 15:32:30
date last changed
2024-03-06 15:21:15
@misc{be73554b-9f50-4295-9757-0db769bef8ab,
  abstract     = {{This paper studies a natural experiment in macroeconomic history: the Irish bank strike of 1966, which led to the closure of the major commercial banks for three months. We use synthetic control to estimate how the economy would have evolved had the strike not happened. We find that economic activity slowed, deviating by 6% from the counter-factual path. Narrative evidence not only supports this finding, but also depicts the struggles of households and firms managing a credit crunch, a liquidity shock, and rising transaction costs. This case study highlights the importance of banks for economic performance.}},
  author       = {{Lennard, Jason and Kenny, Seán and Horgan, Emma}},
  language     = {{eng}},
  note         = {{Working Paper}},
  number       = {{2024:256}},
  series       = {{Lund Papers in Economic History}},
  title        = {{Banks and the Economy : Evidence from the Irish Bank Strike of 1966}},
  url          = {{https://lup.lub.lu.se/search/files/170418308/LUPEH_256.pdf}},
  year         = {{2024}},
}