When Uncle Sam introduced Main Street to Wall Street: Liberty Bonds and the transformation of American finance

• 成果类型: Article
• 署名作者: Hilt, Eric; Jaremski, Matthew; Rahn, Wendy
• 署名单位: Wellesley College; University of Minnesota System; University of Minnesota Twin Cities; National Bureau of Economic Research; National Bureau of Economic Research
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2021.06.043
• 发表日期: 2022
• 页码: 194-216
• 关键词: Liberty bonds; financial literacy; investment banking; Commercial banking; Stockholding; financialization; financial intermediation; financial development; trust

摘要

We study the effects of the Liberty Bond drives of World War I on financial intermediation in the 1920s and beyond. Using panel data on US counties, and an instrument that captures differences in the approaches used to market the bonds, we find that higher Liberty Bond subscription rates led to an increase in investment banks and a contraction in commercial bank assets. We also find that in the late 1930s, individuals residing in states where Liberty Bond subscription rates had been higher were more likely to report owning stocks or bonds. Although they were conducted to support the American effort in World War I, these bond drives reshaped American finance. (c) 2021 Elsevier B.V. All rights reserved.