scholarly journals Relationship Lending and the Great Depression

2020 ◽  
pp. 1-45 ◽  
Author(s):  
Jon Cohen ◽  
Kinda Hachem ◽  
Gary Richardson
Keyword(s):  
Great Depression ◽  
Banking Sector ◽  
Relationship Lending ◽  
Historical Evidence ◽  
Lending Relationships ◽  
Real Effects ◽  
The Great Depression ◽  
Bank Funding ◽  
Level Of Aggregation

The collapse of long-term lending relationships amplified the Great Depression. We demonstrate this by developing a new measure of lending relationships that can be calculated from widely available data at any level of aggregation. Our approach exploits differences in the responsiveness of loan rates to bank funding costs and is supported by historical evidence and theoretical arguments. The new measure reveals that the marginal impact of bank suspensions on economic activity was higher in more relationship-intensive areas, providing the first formal evidence that relationship lending propagated the real effects of banking sector distress in the early 1930s.

scholarly journals From Material to Non-Material Needs? The Evolution of Mate Preferences through the Twentieth Century in France

2021 ◽  
pp. 1-41
Author(s):  
Quentin Lippmann
Keyword(s):  
Twentieth Century ◽  
Great Depression ◽  
Mate Preferences ◽  
Demographic Changes ◽  
French Society ◽  
The Great Depression ◽  
Economic Boom ◽  
Economic Criteria

This paper studies the evolution of mate preferences throughout the twentieth century in France. I digitized all the matrimonial ads published in France’s best-selling monthly magazine from 1928 to 1994. Using dictionary-based methods, I show that mate preferences were mostly stable during the Great Depression, WWII, and the ensuing economic boom. These preferences started transforming in the late 1960s when economic criteria were progressively replaced by personality criteria. The timing coincides with profound family and demographic changes in French society. These findings suggest that, in the search for a long-term partner, non-material needs have replaced material ones.

Bank Failures, The Great Depression, and Other “Contagious” Events

2019 ◽  
pp. 909-927
Author(s):  
Charles W. Calomiris
Keyword(s):  
Public Policy ◽  
Great Depression ◽  
Deposit Insurance ◽  
Policy Implications ◽  
Bank Failures ◽  
Historical Evidence ◽  
Lender Of Last Resort ◽  
Safety Nets ◽  
The Public ◽  
The Great Depression

Deposit withdrawal pressures on banks, which sometimes take the form of sudden runs, have figured prominently in the discussion of public policy toward banks and the construction of safety nets such as deposit insurance and the lender of last resort. This chapter examines historical evidence from the Great Depression, and other episodes, on the factors that prompted withdrawals, the discussion of contagious runs, and the public policy implications. The historical evidence is presented in detail and is connected to the debate over the proper roles of deposit market discipline via the threat of withdrawals, the insurance of deposits, and lender-of-last-resort support for banks facing withdrawal pressures.

The Advent of a New Banking System in the US

2021 ◽  
pp. 24-46
Author(s):  
João Rafael Cunha
Keyword(s):  
United States ◽  
Great Depression ◽  
Banking Sector ◽  
Banking System ◽  
Financial System ◽  
The United States ◽  
Financial Deregulation ◽  
The Great Depression ◽  
Regulatory Changes ◽  
The Us

The 1980s was one of the most eventful and consequential decades in the development of the US financial system. During this decade, the regulatory framework established in response to the Great Depression started to be dismantled. These regulatory changes were a key driving force behind the transformation of the banking sector. Moreover, the end of the decade saw the most serious banking crisis since the Great Depression. This pattern of deregulation and crises, which started in the 1980s, has continued until the present. Thus, it is worth study this period in greater detail and the consequences it has had for the US banking and financial system. The chapter argues that the deregulatory process that started in the 1980s in the banking industry in the United States has changed the profile of this sector. Between the Great Depression and the 1980s, the banking sector in the United States was a stable, yet not competitive sector. The financial deregulation of the 1980s changed this sector to a competitive, yet unstable one. This deregulatory process occurred mostly as a response to the economic conditions of the 1970s.

Payout Yields and Stock Return Predictability: How Important Is the Measure of Cash Flow?

2017 ◽  
Vol 52 (4) ◽  
pp. 1639-1666 ◽  
Author(s):  
Gregory W. Eaton ◽  
Bradley S. Paye
Keyword(s):  
Great Depression ◽  
Cash Flow ◽  
Optimal Policy ◽  
Stock Return ◽  
Return Predictability ◽  
Stock Return Predictability ◽  
The Great Depression ◽  
Forecasting Performance ◽  
Hedging Demand

We compare the stock return forecasting performance of alternative payout yields. The net payout yield produces more accurate forecasts relative to alternatives, including the traditional dividend yield. This remains true even after excluding several years during the Great Depression when issuance was unusually high. The measure of cash flow used to form the yield matters economically. Long-term investors’ hedging demand for stock is considerably reduced when net payout, rather than dividends, serves as the cash-flow measure. An agent relying on an incorrect payout measure is willing to pay an economically significant “management fee” to switch to the optimal policy.

READING KEYNES AT THE ZERO LOWER BOUND: THE GREAT DEPRESSION, THE LIQUIDITY TRAP, AND UNCONVENTIONAL POLICY

2018 ◽  
Vol 40 (3) ◽  
pp. 301-334 ◽  
Author(s):  
Richard Sutch
Keyword(s):  
Monetary Policy ◽  
Lower Bound ◽  
Interest Rates ◽  
Great Depression ◽  
Zero Lower Bound ◽  
Liquidity Trap ◽  
The Great Depression ◽  
Nominal Interest Rates

John Maynard Keynes’s analysis of the Great Depression has strong parallels to recent theorizing about the post-2008 Great Recession. There are also remarkable similarities between the two historical episodes: the collapse of demand for new fixed investment, the role of the zero lower bound liquidity trap in hampering conventional monetary policy, the multi-year period of near-zero short-term rates, and the protracted period of subnormal prosperity. A major difference between then and now is that monetary authorities in the recent situation actively pursued an unconventional policy with massive purchases of long-term securities. Keynes couldn’t convince authorities of his era to pursue such a plan, but it was precisely the monetary policy he advocated for a depressed economy stuck at the zero lower bound of nominal interest rates.

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