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BANKS, FREE BANKS, AND U.S. ECONOMIC GROWTH
Author(s) -
JAREMSKI MATTHEW,
ROUSSEAU PETER L.
Publication year - 2013
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.2012.00495.x
Subject(s) - economics , federalist , urbanization , state (computer science) , monetary economics , jump , financial system , economic growth , political science , law , physics , algorithm , quantum mechanics , politics , computer science
The “Federalist financial revolution” may have jump‐started the U.S. economy into modern growth, but the Free Banking System (1837–1862) did not play a direct role in sustaining it. Despite lowering entry barriers and extending banking into developing regions, we find in county‐level data that free banks had little or no effect on growth. The result is not just a symptom of the era, as state‐chartered banks seem to have strong and positive effects on manufacturing and urbanization . ( JEL G21, N21, O43)