Monetary Intervention Really Did Mitigate Banking Panics During the Great Depression: Evidence Along the Atlanta Federal Reserve District Border

Jalil, Andrew

doi:10.1017/s0022050714000096

Cited by 35 publications

(7 citation statements)

References 10 publications

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“…Most business exit 1 Earlier work by Wicker (1996) noted the differences between the policies of regional reserve banks and their impact on regional bank failure rates. Jalil (2014) recently confirmed that the conclusions of Richardson and Troost (2009) apply to all counties bordering the Atlanta district. merely represents owners' decisions to seek higher profits elsewhere, and most businesses pay their debts in full when they exit.…”

Section: Introductionmentioning

confidence: 60%

Credit Relationships and Business Bankruptcy during the Great Depression

Hansen

Ziebarth

2017

American Economic Journal: Macroeconomics

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Credit relationships are sticky. Stickiness makes relationships beneficial to borrowers in times of their own distress but makes them potentially problematic when lenders themselves face hardship. To examine the role of credit relationships during a financial crisis, we exploit a natural experiment in Mississippi during the Great Depression that generated plausibly exogenous differences in financial distress for banks. Using new data drawn from the publications of the credit rating agency Dun & Bradstreet and from original bankruptcy filings, we show that financial distress increased business exit but did not increase the bankruptcy rate. Financial distress caused both banks and trade creditors to recalibrate their collections strategies, which is revealed by changes in the geographical distribution of the creditors of bankrupt businesses. (JEL G21, G24, G33, N12, N22, N82)

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Section: Introductionmentioning

confidence: 60%

Credit Relationships and Business Bankruptcy during the Great Depression

Hansen

Ziebarth

2017

American Economic Journal: Macroeconomics

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“…Finally, I extend the methodology of seminal papers by and Jalil (2014) who exploit historical Federal Reserve border discontinuities to show that liquidity provision by the Federal Reserve System mitigated banking panics during the Great Depression of the 1930s. My study differs from theirs along several dimensions.…”

Section: Contributions To the Literaturementioning

confidence: 87%

Financial Stability Policies and Bank Lending: Quasi-Experimental Evidence from Federal Reserve Interventions in 1920-21

Rieder

2020

SSRN Journal

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“…For example, for observations that are aggregated into groups, Conley and Taber (2011) proposed a simple model that would allow for temporal and SD and cross-sectional heteroskedasticity, depending on the group population. Heterogeneity of treatment across geographic space can be identified when investigating the differential effect of administrative borders on a policy (Jalil 2014). However, tools to detect the causation for that differentiation have not yet been fully developed.…”

Section: A Spatial Perspective On Treatment Effect Evaluationmentioning

confidence: 99%

“… 1. Jalil (2014) extended a panel regression model along buffered borders of the boundary of the Atlanta Federal Reserve District to investigate lending policies during the Great Depression, but there was no explicit treatment of the spatial spillovers involved. …”

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confidence: 99%

A Spatial Perspective on the Econometrics of Program Evaluation

Kolak

Anselin

2019

International Regional Science Review

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Empirical work in regional science has seen a growing interest in causal inference, leveraging insights from econometrics, statistics, and related fields. This has resulted in several conceptual as well as empirical papers. However, the role of spatial effects, such as spatial dependence (SD) and spatial heterogeneity (SH), is less well understood in this context. Such spatial effects violate the so-called stable unit treatment value assumption advanced by Rubin as part of the foundational framework for empirical treatment effect analysis. In this article, we consider the role of spatial effects more closely. We provide a brief overview of a number of attempts to extend existing econometric treatment effect evaluation methods with an accounting for spatial aspects and outline and illustrate an alternative approach. Specifically, we propose a spatially explicit counterfactual framework that leverages spatial panel econometrics to account for both SD and SH in treatment choice, treatment variation, and treatment effects. We illustrate this framework with a replication of a well-known treatment effect analysis, that is, the evaluation effect of minimum legal drinking age laws on mortality for US states during the period 1970–1984, a classic textbook example of applied causal inference. We replicate the results available in the literature and compare these to a range of alternative specifications that incorporate spatial effects.

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Monetary Intervention Really Did Mitigate Banking Panics During the Great Depression: Evidence Along the Atlanta Federal Reserve District Border

Cited by 35 publications

References 10 publications

Credit Relationships and Business Bankruptcy during the Great Depression

Credit Relationships and Business Bankruptcy during the Great Depression

Financial Stability Policies and Bank Lending: Quasi-Experimental Evidence from Federal Reserve Interventions in 1920-21

A Spatial Perspective on the Econometrics of Program Evaluation

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