Crisis? What Crisis?

descriptionPublicationkeyboard_double_arrow_right Research , Preprint 01 Dec 2009Embargo end date: 16 Jun 2017Publisher:Humboldt-Universität zu Berlin, Wirtschaftswissenschaftliche Fakultät

Authors: Ritschl, Albrecht; Sarferaz, Samad;

doi: 10.18452/4242

handle: 10419/39302

Crisis? What Crisis?

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Abstract

This paper examines the role of currency and banking in the German financial crisis of 1931 for both Germany and the U.S. We specify a structural dynamic factor model to identify financial and monetary factors separately for each of the two economies. We find that monetary transmission through the Gold Standard played only a minor role in causing and propagating the crisis, while financial distress was important. We also find evidence of crisis propagation from Germany to the U.S. via the banking channel. Banking distress in both economies was apparently not endogenous to monetary policy. Results confirm Bernanke's (1983) conjecture that an independent, non-monetary financial channel of crisis propagation was operative in the Great Depression.

Related Organizations

London School of Economics and Political Science
United Kingdom
Humboldt-Universität zu Berlin
Germany
Humboldt-Universität zu Berlin
Humboldt-Universität zu Berlin

Keywords

Geldpolitik, Finanzmarktkrise, banking, Great Depression, Bankenliquidität, Transmissionsmechanismus, Goldwährung, C53, Deutschland, Wirtschaftsgeschichte, USA, 1931 financial crisis; banking; Bayesian factor analysis; currency; Great Depression; international business cycle transmission, Währungspolitik, N12, N13, international business cycle transmission, ddc:330, E37, 330 Wirtschaft, currency, Great Depression; 1931 financial crisis; international business cycle transmission; Bayesian factor analysis; currency; banking, Great Depression, 1931 financial crisis, international business cycle transmission, Bayesian factor analysis, currency, banking, Bayesian factor analysis, 1931 financial crisis, E47, jel: jel:E47, jel: jel:C53, jel: jel:E37, jel: jel:N13, jel: jel:N12

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