Economic Quarterly

2003

 

Spring 2003

Economic Fundamentals and Bank Runs

Huberto M. Ennis

Recent research has argued that the multiple-equilibria explanation of bank runs is inconsistent with a basic stylized fact: bank runs tend to occur under poor economic conditions. This conclusion is not well justified. Reasonable theories that explain bank runs as self-fulfilling events can also explain the correlation of bank runs with deteriorating economic fundamentals.

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