A New History of Banking Panics in the United States, 1825–1929: Construction and Implications

There are two major problems in identifying the output effects of banking panics of the pre–Great Depression era. First, it is not clear when panics occurred because prior panic series differ in their identification of panic episodes. Second, establishing the direction of causality is tricky. This paper addresses these two problems (i) by deriving a new panic series for the 1825–1929 period and (ii) by studying the output effects of major banking panics via vector autoregression (VAR) and narrative-based methods. The new series has important implications for the history of financial panics in the United States. (JEL E32, E44, G21, N11, N12, N21, N22)