Workshop on Monetary and Financial History - June 24-27, 2013

Recent Workshop Considered Many Aspects of Monetary and Financial History

The Federal Reserve Bank of Atlanta and Emory University cohosted a workshop on monetary and financial history from June 24 through June 27, 2013. The workshop—organized by Michael Bordo (Rutgers University), Caroline Fohlin (Emory University), and Will Roberds (Atlanta Fed)—featured 17 presentations covering a wide range of topics.

François Velde (Chicago Fed) presented a paper on the pricing of 18th-century English government securities that were structured as lotteries, while Stephen Quinn (Texas Christian University; paper cowritten with Roberds) discussed the collapse of a prominent central bank, the Bank of Amsterdam, at the end of the 18th century.

Richard Sylla (New York University; paper cowritten with Peter Rousseau, Vanderbilt) focused on the monetary impact of two early U.S. central banks, the first and second Banks of the United States. Banking panics during the U.S. National Banking Era (from the Civil War to World War I) were the topic of two workshop presentations, the first by David Weiman (Columbia University; paper cowritten with John James, University of Virginia, and James McAndrews, New York Fed) and the second by Ellis Tallman (Oberlin College; paper cowritten with Margaret Jacobson, Cleveland Fed). Mark Carlson (Federal Reserve Board; cowritten with Charles Calomiris, Columbia University) presented a related paper that considered the impact of corporate governance on the behavior of U.S. banks during this same period.

Richard Grossman (Wesleyan University) discussed his work measuring the development of the London Stock Exchange in the decades preceding World War I, and Eugene White (Rutgers University; paper cowritten with Pierre-Cyrille Hautcoeur and Angelo Riva, both of the Paris School of Economics) presented an analysis of the response by the Banque de France to a late 19th-century crisis. Ricardo Fernholz (Claremont McKenna College; paper cowritten with Marc Weidenmier, Claremont McKenna, and Kris Mitchener (Santa Clara University), all of the University of Warwick) presented a model of the worldwide transition from a bimetallic to a gold standard, which occurred at the end of the 19th century.

Two papers considered developments in the United States during the 1920s. The first was by Rodney Ramcharan (Federal Reserve Board; paper cowritten with Raghuram Rajan, University of Chicago) that considered the impact of farmland "fire sales" for the recovery rates of failed banks. Caroline Fohlin examined the impact of the 1920s expansion in trading on the New York Stock Exchange, focusing on possible explanations for observed increases in transaction costs over this period.

Various aspects of the Great Depression were the subject of three presentations at the workshop. Chris Meissner (University of California, Davis, paper cowritten with Michael Bordo) presented a cross-country analysis of the impact of countries' decisions to default on their foreign currency debt in the early 1930s. A paper by Kris Mitchener and Gary Richardson (Richmond Fed) analyzed the impact of interbank deposits on the propagation of U.S. bank panics. A related paper by Richardson, Erik Heitfeld (Federal Reserve Board) and Shirley Wang (Cornell) presented a more specialized analysis, focusing on potential network effects observed during the bank panics that occurred in late 1930.

A presentation by Owen Humpage (Cleveland Fed; paper cowritten with Sanchita Mukherjee, University of California, Santa Cruz) focused on the period of the Great Inflation (1965–80). Humpage found that inflation was little affected by the Federal Reserve's "even keel" operations in support of the Treasury bond sales.

Hugh Rockoff (Rutgers University) surveyed 12 peacetime U.S. financial panics from 1819 to the most recent crisis (2008). He argued that the 2008 Lehman panic, far from being unique, had many features in common with earlier episodes.

Barry Eichengreen (University of California, Berkeley) gave the keynote presentation for the conference. Eichengreen focused on the parallels between the relatively decentralized structure of TARGET2 (the large-value payment system of the Euro currency) and the settlement arrangements among the Federal Reserve Banks in the early days of the Federal Reserve System. The crises of the Great Depression ultimately resulted in greater unification of the Federal Reserve's settlement system, and Eichengreen argued that TARGET2 today is experiencing the same types of strains that the Fed underwent in the 1930s.