The Effect of Bank Failures on Economic Activity: Evidence from U.S. States in the Early 20th Century
利用1900-1929年美国各州季度数据，通过向量自回归模型发现银行倒闭会放大经济困境，并考察了存款保险和最低资本要求等监管因素的作用。
This paper provides evidence documenting the existence of a “bank failure channel”—the magnifying effect of bank failures on economic distress—using state‐level quarterly time series from 1900q1 to 1929q4. We estimate a vector autoregression model of bank failures for each state. The forecast‐error variance decompositions are used to construct a categorical measure of the “bank failure channel.” We examine the influence of regulatory variables, economic conditions, and banking conditions on the degree to which bank failures propagate distress. State‐sponsored deposit insurance and minimum capital requirements are important for explaining the likelihood of having a bank failure channel.