Market Contagion: Evidence from the Panics of 1854 and 1857

The American Economic Review, Vol. 90 No. 5

Posted: 15 Apr 2016

See all articles by Morgan Kelly

Morgan Kelly

University College Dublin (UCD) - Department of Economics

Cormac O'Grada

University College Dublin (UCD)

Date Written: December 2000

Abstract

To test a model of contagion — where individuals hear some bad news and communicate it to their acquaintances, who then pass it on, leading to a market panic — requires a knowledge of the information networks of participants, something hitherto unavailable. For two panics in the !850's this paper examines the behavior of Irish depositors in a New York bank. As recent immigrants, their social network was determined largely by their place of origin in Ireland, and where they lived in New York. During both panics this social network turns out to be the prime determinant of behavior.

Keywords: contagion, banking, economic history

JEL Classification: G21, N21

Suggested Citation

Kelly, Morgan and O'Grada, Cormac, Market Contagion: Evidence from the Panics of 1854 and 1857 (December 2000). The American Economic Review, Vol. 90 No. 5, Available at SSRN: https://ssrn.com/abstract=2764889

Morgan Kelly

University College Dublin (UCD) - Department of Economics ( email )

Belfield
Dublin 4, Dublin 4
Ireland
+353 1 706 8611 (Phone)
+353 1 283 0068 (Fax)

Cormac O'Grada (Contact Author)

University College Dublin (UCD) ( email )

Dublin 4, 4
Ireland

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