THE HISTORY of FINANCIAL CRISES Critical Concepts in Finance Edited by D

THE HISTORY OF

FINANCIAL CRISES

Critical Concepts in Finance

Edited by D 'Maris Coffman and

Larry Neal

Volume III The gold Standard era

ij Routledge § % Taylor & Francis Croup LONDON AND NEW YORK CONTENTS

VOLUME III THE GOLD STANDARD ERA

A cknowledgements

Introduction

35 The Baring Crisis in a Mexican mirror BARRY EICHENGREEN

36 The Baring Crisis and the Brazilian Encilhamento, 1889-1891: an early example of contagion among emerging capital markets GAIL D. TRINER AND KIRSTEN WANDSCHNEIDER

37 The Barings Crises of 1890 and 1995: causes, courses, consequences and the danger of domino effects JAN KÖRNERT

38 The 'Wizard of Oz' as a monetary allegory HUGH ROCKOFF

39 Free banking gone awry: the Australian banking crisis of 1893 CHARLES R. HICKSON AND JOHN D. TURNER

40 Causes of bank suspensions in the Panic of 1893 MARK CARLSON CONTENTS

41 Bank fragility, 'money under the mattress', and long-run growth: US evidence from the 'perfect' Panic of 1893 147 CARLOS D. RAMIREZ

42 The American Crisis of 1907 178 O. M. W. SPRAGUE

43 Real shock, monetary aftershock: the 1906 San Francisco earthquake and the panic of 1907 193 KERRY A. ODELL AND MARC D. WEIDENMIER

44 Bank panics and the endogeneity of central banking 216 GARY GORTON AND LIXIN HUANG

45 The Bank Panic of 1907: the role of the trust com panies 236 JON MOEN AND ELL1S W. TALLMAN

46 Liquidity creation without a central bank: Clearing house loan certificate^ in the banking panic of 1907 255 ELLIS W. TALLMAN AND JON R. MOEN

47 Not just the Great Contraction: Friedman and Schwartz's A Monetary History of the United States 1867 to 1960 285 MICHAEL D. BORDO AND HUGH ROCKOFF

48 Nonmonetary effects of the financial crisis in the propagation of the Great Depression 293 BEN S. BERNANKE

49 The macroeconomics of the Great Depression: a comparative approach 320 BEN S. BERNANKE

50 The gold Standard, deflation, and financial crisis in the Great Depression: an international comparison 350 BEN BERNANKE AND HAROLD JAMES

51 Financial factors in the Great Depression 385 CHARLES W. CALOMIRIS

vi CONTENTS

52 The 1929 stock market: Irving Fisher was right 411 ELLEN R. McGRATTAN AND EDWARD C. PRESCOTT

53 Was there a bubble in the 1929 stock market? 431 PETER RAPPOPORT AND EUGENE N. WHITE

54 The role of liquidity and implicit guarantees in the German twin crisis of 1931 456 ISABEL SCHNABEL

55 The stock market boom and crash of 1929 revisited 493 EUGENE N. WHITE

56 The faiiure of the Bank of United States: a reappraisal 511 JOSEPH L. LUCIA

57 Why do bank runs look like panic? A new expianation 525 YEHNING CHEN AND IFTEKHAR HASAN

58 The 1931 Sterling crisis and the independence of the Bank of England 537 WILLIAM H. JANEWAY

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