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Full-Text Articles in Economics
Political Barriers And The Transmission Of Monetary Policy Across States: The New England Antebellum Banking Market, Andrew J. Economopoulos
Political Barriers And The Transmission Of Monetary Policy Across States: The New England Antebellum Banking Market, Andrew J. Economopoulos
Business and Economics Faculty Publications
The New England antebellum banking market was examined to understand the interaction of political ideology and economic forces. With each state controlling bank entry, hence the money supply, political ideology could impede the supply of money within a state. However, the monetary forces from neighboring states may have influenced the degree to which parties held true to their political ideology. The results indicate that political ideology was an effective barrier in two of the six states, while three states were responsive to neighbor states' monetary policy regardless of political ideology. These states responded by creating new banks, raising existing capital …
Bank Entry During The Antebellum Period, Andrew J. Economopoulos, Heather M. O'Neill
Bank Entry During The Antebellum Period, Andrew J. Economopoulos, Heather M. O'Neill
Business and Economics Faculty Publications
A recent study by Kenneth Ng (1988) challenges the view that free banking laws lowered barriers to entry. The authors' study examines bank entry and capital formation in free and nonfree banking states during the free banking period. A competitive model is developed and used to test if barriers were lowered in free banking states. The evidence indicates that entry significantly increased after the enactment of the free banking laws and that entry policy in nonfree banking states appeared to have been 'liberalized' when the free banking laws were enacted in other states.
The New York Free Banking Era: Deregulation Or Reregulation?, Andrew J. Economopoulos
The New York Free Banking Era: Deregulation Or Reregulation?, Andrew J. Economopoulos
Business and Economics Faculty Publications
The deregulation of the banking market is a frequently debated policy issue. Proponents of deregulation claim that free market forces would improve market efficiency. The basis for their argument is grounded in the work and tenets of Adam Smith. Deregulation opponents claim that a bank market left unfettered would disrupt the financial market; bank mismanagement, failures, and panics would pervade the market and cause distrust of the banking system . Opponents of deregulation derive their beliefs from actual historical experiences rather than theory . Many opponents point to a period of American banking history, called the Free Banking Era (1838-1863), …
The Impact Of Reserve Requirements On Free Bank Failures, Andrew J. Economopoulos
The Impact Of Reserve Requirements On Free Bank Failures, Andrew J. Economopoulos
Business and Economics Faculty Publications
The Free Banking Era, noted for numerous bank failures and large creditor losses, has been traditionally viewed as the experiment in laissez-faire banking that failed. Current researchers have found evidence suggesting that bank failures and creditor losses were limited to selected states and have linked the cause of bank failures to periods of falling asset prices. Free banks were required to hold long-term assets as primary reserves for short-term liabilities. Current banking theory suggests that the maturity imbalance between assets and liabilities increases the free bank's exposure to interest rate risk. Some states imposed a secondary reserve, the specie reserve …