'Loans for the Little Fellow:' Credit, Crisis, and Recovery in the Great Depression

86 Pages Posted: 17 Dec 2019

Date Written: December 13, 2019

Abstract

This paper studies how structural transformation exacerbates financial crises. Using newly collected data, I document the persistent effect of credit supply shocks on local economies during the Great Depression. Cities with access to an unusually generous branching network were no different from other California cities in the 1920s but had significantly smaller recessions and stronger recoveries in the 1930s. Linked worker-level data demonstrate local credit supply shifted workers out of agriculture and into nontradable employment, which was higher-skilled, creating a lingering barrier to convergence.

Keywords: Great Depression, Credit Supply, Branch Banking, Structural Transformation

JEL Classification: E44, G01, G21, N22, R23

Suggested Citation

Quincy, Sarah, 'Loans for the Little Fellow:' Credit, Crisis, and Recovery in the Great Depression (December 13, 2019). Available at SSRN: https://ssrn.com/abstract=3503590 or http://dx.doi.org/10.2139/ssrn.3503590

Sarah Quincy (Contact Author)

Vanderbilt University ( email )

2301 Vanderbilt Place
Nashville, TN 37240
United States

HOME PAGE: http://www.sarahquincy.com

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