-
About the
New York Fed -
Economic
Research -
Financial Institution Supervision
- Financial Services
& Infrastructure- Outreach
& EducationThe New York Fed engages with individuals, households and businesses in the Second District and maintains an active dialogue in the region. The Bank gathers and shares regional economic intelligence to inform our community and policy makers, and promotes sound financial and economic decisions through community development and education programs.
Liberty Street Economics
6 posts on "Panic"February 05, 2016
Crisis Chronicles: The Long Depression and the Panic of 1873
It always seemed to come down to railroads in the 1800s. Railroads fueled much of the economic growth in the United States at that time, but they required that a great deal of upfront capital be devoted to risky projects. The panics of 1837 and 1857 can both be pinned on railroad investments that went awry, creating enough doubt about the banking system to cause pervasive bank runs. The fatal spark for the Panic of 1873 was also tied to railroad investments—a major bank financing a railroad venture announced that it would suspend withdrawals. As other banks started failing, consumers and businesses pulled back and America entered what is recorded as the country’s longest depression.
Continue reading "Crisis Chronicles: The Long Depression and the Panic of 1873" »
Posted by Blog Author at 7:00 AM in Crisis, Crisis Chronicles , Economic History, Financial Institutions, Inflation, Panic, Unemployment | Permalink | Comments (1)January 15, 2016
Crisis Chronicles: The Gold Panic of 1869, America’s First Black Friday
Wall Street in the late 1860s was a bare-knuckles affair plagued by robber barons, political patronage, and stock manipulation. In perhaps the most scandalous instance of manipulation ever, a cabal led by Jay Gould, a successful but ruthless railroad executive and speculator, and several highly placed political contacts, conspired to corner the gold market. Although ultimately foiled, they succeeded in bankrupting several venerable brokerage houses and crashing the stock market, causing America’s first Black Friday.
Continue reading "Crisis Chronicles: The Gold Panic of 1869, America’s First Black Friday" »
Posted by Blog Author at 7:00 AM in Crisis Chronicles , Economic History, Exports, Financial Markets, Panic | Permalink | Comments (3)October 02, 2015
Crisis Chronicles: Defensive Suspension and the Panic of 1857
Sometimes the world loses its bearings and the best alternative is a timeout. Such was the case during the Panic of 1857, which started when a prestigious bank in New York City collapsed, making all banks suddenly suspect. Banks, fearing a run on their gold reserves, started calling in loans from commercial firms and brokers, leading to asset sales at fire-sale prices and bankruptcies. By mid-October, banks in Philadelphia and New York suspended convertibility, meaning they would not allow gold to be withdrawn from their vaults even while all other banking services continued. Suspension then swept the nation as part of a defensive strategy, supported by local business interests, to prevent the Panic from spreading. While the suspensions appeared successful and few banks ended up failing, President Buchanan was outraged by what he viewed as yet another corrupt banking practice. He proposed making suspension a “death sentence” for banks as a draconian incentive to encourage safer banking practices. In this edition of Crisis Chronicles, we describe the Panic of 1857 and explain why businesses pushed for national suspension to save themselves.
Continue reading "Crisis Chronicles: Defensive Suspension and the Panic of 1857" »
Posted by Blog Author at 7:00 AM in Banks, Crisis Chronicles , Economic History, Panic | Permalink | Comments (3)May 08, 2015
Crisis Chronicles: The Man on the Twenty-Dollar Bill and the Panic of 1837
Correction: This post was updated on May 8 to correct the book title and spelling of the author’s name in the fifth paragraph. We regret the error.
President Andrew Jackson was a "hard money" man. He saw specie—that is, gold and silver—as real money, and considered paper money a suspicious store of value fabricated by corrupt bankers. So Jackson issued a decree that purchases of government land could only be made with gold or silver. And just as much as Jackson loved hard money, he despised the elites running the banking system, so he embarked on a crusade to abolish the Second Bank of the United States (the Bank). Both of these efforts by Jackson boosted the demand for specie and revealed the soft spots in an economy based on hard money. In this edition of Crisis Chronicles, we show how the heightened demand for specie ultimately led to the Panic of 1837, resulting in a credit crunch that pushed the economy into a depression that lasted until 1843.
Continue reading "Crisis Chronicles: The Man on the Twenty-Dollar Bill and the Panic of 1837" »
Posted by Blog Author at 7:00 AM in Crisis Chronicles , Economic History, Panic | Permalink | Comments (8)April 10, 2015
Crisis Chronicles: The Panic of 1825 and the Most Fantastic Financial Swindle of All Time
Centered in London, the banking panic of 1825 has been called the first modern financial crisis, the first Latin American crisis, and the first emerging market crisis. And while the panic displayed many of the key elements of past crises we have covered—fluctuations in money growth, an investment bubble, a stock market crash, and bank runs—this crisis had its own twists, including a Bank of England that hesitated before stepping in as lender of last resort. But it is perhaps best known for an infamous bond market swindle surrounding an entirely made-up Central American principality. In this edition of Crisis Chronicles, we explore the Panic of 1825 and visit the mythical nation of Poyais.
Posted by Blog Author at 7:00 AM in Crisis, Crisis Chronicles , Economic History, Lender of Last Resort, Panic, Unemployment | Permalink | Comments (3)December 05, 2014
Crisis Chronicles: The Panic of 1819—America’s First Great Economic Crisis
Authors’ Update: Murray Rothbard’s The Panic of 1819: Reactions and Policies was an additional source for this post and should have been cited. We regret the omission.
As we noted in our last post on the British crisis of 1816, while Britain emerged from nearly a quarter century of war with France ready to supply the world with manufactured goods, it needed cotton to supply the mills, and all of Europe needed wheat to supplement a series of poor harvests. The United States met that demand for cotton and wheat by expanding agricultural production, facilitated by the loose credit policies of a growing number of lightly regulated state banks. Meanwhile, the Treasury needed revenue to pay off debts from the Louisiana Purchase and the War of 1812, so the government turned to selling land acquired in the Louisiana Purchase. But the increased agricultural demand and easy credit policies led to a speculative real estate boom, particularly in Alabama. So when the Treasury started to pay off its debts, the specie drain caused a painful but necessary contraction and the boom went bust. In this edition of Crisis Chronicles, we describe America’s first great economic crisis.
Continue reading "Crisis Chronicles: The Panic of 1819—America’s First Great Economic Crisis" »
About the BlogLiberty Street Economics features insight and analysis from New York Fed economists working at the intersection of research and policy. Launched in 2011, the blog takes its name from the Bank’s headquarters at 33 Liberty Street in Manhattan’s Financial District.
The editors are Michael Fleming, Andrew Haughwout, Thomas Klitgaard, and Asani Sarkar, all economists in the Bank’s Research Group.
Liberty Street Economics does not publish new posts during the blackout periods surrounding Federal Open Market Committee meetings.
The views expressed are those of the authors, and do not necessarily reflect the position of the New York Fed or the Federal Reserve System.
Economic Research Tracker
Liberty Street Economics is now available on the iPhone® and iPad® and can be customized by economic research topic or economist.
View by Topicbank capital balance of payments banks central bank corporate finance credit crisis crisis chronicles cryptocurrencies currency current account dealers demographics dodd-frank dsge economic history education employment euro area exchange rates expectations exports fed funds federal reserve financial institutions financial intermediation financial markets fire sale fiscal policy fomc forecasting foreclosure great recession hey, economist! high frequency trading historical echoes household household finance housing human capital inequality inflation international economics labor economics labor market lender of last resort liquidity macroecon monetary policy mortgages new jersey new york new york city pandemic panic phillips curve puerto rico recession regional analysis regulation repo sandy stocks student loans systemic risk tariffs treasury unemployment wagesMost Viewed1. 2. 3. 4. 5.
Last 12 MonthsUseful LinksComment GuidelinesWe encourage your comments and queries on our posts and will publish them (below the post) subject to the following guidelines:Please be brief: Comments are limited to 1500 characters.Please be quick: Comments submitted after COB on Friday will not be published until Monday morning.Please be aware: Comments submitted shortly before or during the FOMC blackout may not be published until after the blackout.Please be on-topic and patient: Comments are moderated and will not appear until they have been reviewed to ensure that they are substantive and clearly related to the topic of the post. We reserve the right not to post any comment, and will not post comments that are abusive, harassing, obscene, or commercial in nature. No notice will be given regarding whether a submission will or will not be posted.Disclosure PolicyThe LSE editors ask authors submitting a post to the blog to confirm that they have no conflicts of interest as defined by the American Economic Association in its Disclosure Policy. If an author has sources of financial support or other interests that could be perceived as influencing the research presented in the post, we disclose that fact in a statement prepared by the author and appended to the author information at the end of the post. If the author has no such interests to disclose, no statement is provided. Note, however, that we do indicate in all cases if a data vendor or other party has a right to review a post.Archives - Financial Services
RSS Feed