Bankruptcy, Debt, and the Macroeconomy, 1919-1946

Research in Economic History, Vol. 20, pp. 99-133, 2001

18 Pages Posted: 21 Mar 2008  

Alexander J. Field

Santa Clara University - Leavey School of Business - Economics Department

Abstract

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.

Keywords: Bankruptcy, Debt, Great Depression

JEL Classification: E32, E51, G2, G33, N22

Suggested Citation

Field, Alexander J., Bankruptcy, Debt, and the Macroeconomy, 1919-1946. Research in Economic History, Vol. 20, pp. 99-133, 2001. Available at SSRN: https://ssrn.com/abstract=1109259

Alexander J. Field (Contact Author)

Santa Clara University - Leavey School of Business - Economics Department ( email )

500 El Camino Real
Santa Clara, CA California 95053
United States
408 554 4348 (Phone)
408 554 2331 (Fax)

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