The political economy of financial regulation
Subtitle: evidence from u.s. state usury laws in the 19th century
By: Efraim Benmelech, Tobias J. Moskowitz.
Contributors: Benmelech, Efraim.; Moskowitz,Tobias J.; National Bureau of Economic Research.
Series: NBER working paper series -- working paper 12851; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 12851.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "We investigate the causes and consequences of financial regulation by studying the political economy of U.S.  state usury laws in the 19th century.  We find evidence that usury laws were binding and enforced and that lending activity was affected by rate ceilings.  Exploiting the heterogeneity across states and time in regulation, enforcement, and market conditions, we find that regulation tightens when it is less costly and when it coexists with other economic and political restrictions that exclude certain groups.  Furthermore, the same determinants of financial regulation that favor one group (and restrict others) are associated with higher (lower) future economic growth rates.  The evidence suggests regulation is the outcome of private interests using the coercive power of the state to extract rents from other groups, highlighting the endogeneity of financial development and growth"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 3/23/2007.

Includes bibliographical references.

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