The official dating of recessions is done by
Once the Great Depression is thrown out as a statistical outlier, we observe no significant change in the frequency, duration, or magnitude of recessions between the period before and the period after that unique downturn.
Given that the Great Depression witnessed the initiation of extensive government policies to alleviate depressions and that the Federal Reserve had been created fifteen years earlier explicitly to prevent such crises, this overall historical continuity with a single exception indicates that government intervention and central banking has done little, if anything, to dampen the business cycle.
I have tried to integrate the best of the approaches of both economists and historians, using them to cross check each other.
My chronology therefore differs in important ways from prior lists.
Among other advantages, the table helps highlight how the Great Depression was.
Not only does it have the longest downturn (43 months), but it also is one of the few depressions accompanied by both bank panics and numerous bank failures.
One very fragmentary and incomplete estimate of total bank suspensions (rather than failures) in (1975), including both state and national banks, puts the number during that panic at 153.So I have created a revised chronology in the table below.From the nineteenth century to the present, it distinguishes between three types of events: major recessions, bank panics, and periods of bank failures.Even if all suspensions had resulted in failures, which of course did not happen, we still have a failure rate of 0.7 percent for all commercial banks. Wheelock (1998), charts meant to show bank failures are instead clearly depicting statistics on the annual number of bank suspensions.Confusion of bank suspensions with bank failures can even infect serious scholarly work. Similarly, periods of numerous bank failures do not always coincide with bank panics, as the S&L crisis dramatically illustrates.
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There has been a dramatic elimination of bank panics, at least until the financial crisis of 2007-2008, but the timing suggests that deposit insurance more than the Federal Reserve deserves the credit.