Banks, Credit Markets, and Early American Development: A Case Study of Entry and Competition
- 1 March 2008
- journal article
- research article
- Published by Cambridge University Press (CUP) in The Journal of Economic History
- Vol. 68 (2), 438-461
- https://doi.org/10.1017/s0022050708000363
Abstract
New England experienced a significant economic transformation after the Revolutionary War. Despite an extensive literature on American development, little is known about the precise role of banks in this process. This article exploits a detailed dataset from Plymouth County, Massachusetts to show that the first bank during its early stage was far more selective in lending than the pre-existing personal credit market. Thus the mere introduction of a single bank did not broaden access to credit. Following the liberalization of chartering policy in the 1820s, however, freer entry and competition drove banks to extend credit to farmers and artisans.This publication has 17 references indexed in Scilit:
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