Monetizing the Economy: National Banks and Local Economic Development
Monetizing the Economy: National Banks and Local Economic Development
Chenzi Xu of Stanford Graduate School of Business and her co-author examine the role of banks in expanding the traded sector of local economies in the United States in the 19th century. The National Banking Act of 1864 created a new class of better-capitalized banks that issued riskless liabilities that circulated as a more stable transactions medium. The improved liquidity of their liabilities was especially important for long-distance exchange. In order to identify the causal impact of this financial change, they use the regulatory feature that national banks faced capital requirements defined by town population cut-offs. Using the capital requirement discontinuity as an instrument for national bank entry, they find that the composition of agricultural production shifted from non-traded crops to traded crops and that employment in trade-related professions and businesses grew. Counties with access to national banks also experienced significant manufacturing output growth from sourcing more inputs, and they innovated more in product markets. In this Quantitative History Webinar, Chenzi Xu will explain how these results are consistent with the change in the financial sector improving locations’ market access.
Chenzi’s co-author: He Yang (Amazon)
Live on Zoom on September 2, 2021
10:00 Hong Kong/Beijing/Singapore
11:00 Tokyo | 12:00 Sydney
Previous Day 19:00 Los Angeles | 22:00 New York
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The Quantitative History Webinar Series, convened by Professor Zhiwu Chen and Dr. Chicheng Ma of The University of Hong Kong (HKU), aims to provide researchers, teachers and students with an online intellectual platform to keep up to date with the latest research in the field, promoting the dissemination of research findings and interdisciplinary use of quantitative methods in historical research. The Series is co-organized by the International Society for Quantitative History, HKU Business School, and the Asia Global Institute (AGI).
Conveners:
Professor Zhiwu Chen
Dr. Chicheng Ma
