Working Paper: NBER ID: w18789
Authors: Matthew S. Jaremski
Abstract: The passage of the National Banking Acts stabilized the existing financial system and encouraged the entry of 729 banks between 1863 and 1866. The national banks not only attracted more deposits than previous state banks, but also concentrated in the area that would eventually become the Manufacturing Belt. Using a new bank census, the paper shows that these changes to the financial system were a major determinant of the geographic distribution of manufacturing. The sudden entry not only resulted in more manufacturing capital and output at the county-level, but also more steam engines and value added at the establishment-level.
Keywords: National Banking; Industrialization; Manufacturing; Economic Growth
JEL Codes: G21; N21; O43
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| National banking acts (E58) | influx of banks in certain counties (G21) |
| influx of banks in certain counties (G21) | manufacturing growth (L60) |
| introduction of a new bank (G21) | increase in capital (E22) |
| introduction of a new bank (G21) | increase in output (E23) |
| national banking acts (E58) | increase in manufacturing growth (O14) |
| national banking acts (E58) | enhancement of banking system's stability (G28) |
| enhancement of banking system's stability (G28) | industrialization (O14) |
| national banking acts (E58) | geographic distribution of manufacturing in the US (L69) |