The Anatomy of a Credit Crisis: The Boom and Bust in Farm Land Prices in the United States in the 1920s

• 成果类型: Article
• 署名作者: Rajan, Raghuram; Ramcharan, Rodney
• 署名单位: University of Chicago; Federal Reserve System - USA; Federal Reserve System Board of Governors
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20120525
• 发表日期: 2015
• 页码: 1439-1477
• 关键词: deposit insurance; financial development; political-economy; MARKET; banking; DEPRESSION; policies; RISK

摘要

Does credit availability exacerbate asset price inflation? Are there long-run consequences? During the farm land price boom and bust before the Great Depression, we find that credit availability directly inflated land prices. Credit also amplified the relationship between positive fundamentals and land prices, leading to greater indebtedness. When fundamentals soured, areas with higher credit availability suffered a greater fall in land prices and had more bank failures. Land prices and credit availability also remained disproportionately low for decades in these areas, suggesting that leverage might render temporary credit-induced booms and busts persistent. We draw lessons for regulatory policy.