George Mason University’s Department of Economics has just hired economic historian Gary Richardson. Gary — along with economic historian John Nye — will join our ranks in the Fall. Here’s an abstract of one of Gary’s latest papers.
- Eight states established deposit insurance systems between 1908 and
1917. All abandoned the systems between 1921 and 1930. Scholars debate
the costs and benefits of these policy experiments. New data drawn from
the archives of the Federal Reserve Board of Governors demonstrate that
deposit insurance influenced the composition of bank suspensions in
these states. In typical years, suspensions due to runs fell.
Suspensions due to mismanagement rose. During the penultimate year of
each system, the bank failure rate rose to an unsustainable height and
the system ceased operations.