Working Paper: NBER ID: w28577
Authors: Hugh Rockoff
Abstract: This is my presidential address to the Economic History Association that was delivered in September 2020. It examines the failures or in some cases near-failures, of financial institutions that started the 12 most severe peacetime financial panics in the United States, beginning with the Panic of 1819 and ending with the Panic of 2008. The following generalizations were true in most cases, although not in all. (1) Panics were triggered by a short series of failures or near-failures; (2) many of the failing institutions were what we would now call shadow banks; (3) typically, the source of trouble was an excessive investment in real estate; and (4) typically, they had outstanding reputations for trustworthiness, prudence, and financial acumen—before they failed. It appears that in these respects the Panic of 2008 was an old-school panic.
Keywords: No keywords provided
JEL Codes: N2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| bank failures (G21) | financial panics (G01) |
| characteristics of shadow banks (G21) | bank failures (G21) |
| real estate speculation (R33) | bank failures (G21) |
| public trust (H82) | financial panics (G01) |