The macroeconomic effects of banking crises: evidence from the United Kingdom, 1750–1938

Seán Kenny; Jason Lennard; John D. Turner

doi:10.1016/j.eeh.2020.101357

The macroeconomic effects of banking crises: evidence from the United Kingdom, 1750–1938

Seán Kenny^*, Jason Lennard, John D. Turner

^*Corresponding author for this work

Queen's Business School (QBS)

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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.

Original language	English
Article number	101357
Number of pages	18
Journal	Explorations in Economic History
Volume	79
Early online date	24 Dec 2020
DOIs	https://doi.org/10.1016/j.eeh.2020.101357
Publication status	Published - 01 Jan 2021

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10.1016/j.eeh.2020.101357Licence: CC BY

The macroeconomic effects of banking crises: evidence from the United Kingdom, 1750–1938
Copyright 2020 The Authors. This is an open access article published under a Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium, provided the author and source are cited.
Final published version, 1.16 MBLicence: CC BY

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The macroeconomic effects of banking crises: evidence from the United Kingdom, 1750–1938

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