Bankruptcy, Debt, and the Macroeconomy, 1919-1946
Alexander J. Field
Santa Clara University - Leavey School of Business - Economics Department
Research in Economic History, Vol. 20, pp. 99-133, 2001
Between 1919 and 1946 bankruptcy rates in the U.S. traced out an inverted U-shaped curve, rising during the 1930s as income levels fell, and then plummeting during the Second World War in the face of both rising income and falling debt levels. This paper explores these relationships econometrically, both at the aggregate level and at the level of a number of individual states. It also discusses the historical evolution, motivation, and macroeconomic consequences of bankruptcy law, concluding that the value of analyses such as those of Joseph Schumpeter and Secretary of the State Andrew Mellon have been too quickly dismissed, at least in their entirety, by scholars such as Ben Bernanke.
Number of Pages in PDF File: 18
Keywords: Bankruptcy, Debt, Great Depression
JEL Classification: E32, E51, G2, G33, N22Accepted Paper Series
Date posted: March 21, 2008
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