Fall 2009 Contact Information
Ellis W. Tallman
Office Hours: Monday 10AM - 12:30 PM, Friday 1:30 PM to PM and by appointment
Office: 29 Rice Hall
Telephone: (440) 775-8592
Fall 2009 Economics Courses
Intermediate Macroeconomic Theory E251
Macroeconomic Theory E343
Downloadable Working Papers
Click on the title above the abstract to download the document file. Most documents are in PDF format. If you have difficulty printing the documents, send an email to me.
"Banking and Financial Crises in United States History: What Guidance Can History Offer Policymakers?" Joint with Elmus R. Wicker, Indiana University.
This paper assesses the validity of comparisons between the current financial crisis and past crises in the United States. We highlight aspects of two National Banking Era crises (the Panic of 1873 and the Panic of 1907) that are relevant for comparison with the Panic of 2008. In 1873, overinvestment in railroad debt and the default of railroad companies on that debt led to the failure of numerous brokerage houses, an antecedent to the modern investment bank. For the Panic of 1907, panic-related deposit withdrawals centered on the less regulated trust companies, which were less directly linked to the existing lender of last resort, similar to investment banks in 2008. The popular press has made numerous references to the banking crises (there were three main ones) of the Great Depression as relevant comparisons to the present crisis. This paper argues that such an analogy is inaccurate in general. Banking crises in US history reflected widespread depositor withdrawals whereas the recent panic arose from counterparty solvency fears. The lessons from the past, therefore, appear less directly relevant for the current crisis.
Liquidity creation without a lender of last resort: clearinghouse loan certificates in the Banking Panic of 1907," [To be revised]
Joint with Jon R. Moen, University of Mississippi. This paper examines how the New York Clearing House and its member banks used the issuance of clearing house loan certificates to supply the New York financial market with temporary liquidity during the Panic of 1907. The paper employs previously underutilized data that indicates the identity of the requesting bank, the total amount on issuance, and the date of cancellation of the clearing house loan certificate issue. We find that the large, money center banks requested the majority of the temporary liquidity issued during the panic. The finding is not surprising given that these were the institutions that were large enough (and at that time liquid enough) to request an amount of temporary liquidity sufficient to support the financial markets and to extend credit for the importation of gold from abroad. Financial market indicators returned to normal levels only after the gold arrived and the majority of clearing house loan certificates were cancelled.
Forecasting Using Relative Entropy. Joint with John C. Robertson and Charles H. Whiteman. Published in Journal of Money, Credit, and Banking, (June 2005), 37, 3, 383-401.
Permanent Income and Transitory Variation in Investment and Output. Joint with with Lance A.Fisher and Hyeon-seung Huh. Published in Journal of Macroeconomics, (June 2003), 25, 2, 149-68.
Improving Federal-Funds Rate Forecasts in VAR Models Used for Policy Analysis
Joint with John C. Robertson. Published in Journal of Business and Economic Statistics, (July 2001) 19, 3, 324-30.(File in PDF format.)
The Bank Panic of 1907: The Role of Trust Companies. Joint with Jon R. Moen. Published in Journal of Economic History, Vol. 52, No. 3 (Sep., 1992), pp. 611-630
Talks and Discussions of Papers
Talk on the Current Crisis in Historical Perspective. Presented at Indiana University, Bloomington, Indiana, April 3-4, 2009.
Comment on "Trends in the Aggregate Labor Force" by Kenneth J. Matheny presented at the 33rd Annual Economic Policy Conference of Federal Reserve Bank of St. Louis. October 16-17, 2009.