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Working Papers

March 1993, No. 93-2

Identifying Credit Crunches

Raymond E. Owens III and Stacey L. Schreft

(WP 93-2 replaces an earlier version listed as WP 92-1)

This article emphasizes the role of nonprice rationing in credit crunches. It proposes a process for identifying credit crunches centered on the political economy of the period under study. The process is applied to the U.S. for the 1960-92 period, and a variable is constructed that indicates when credit crunches occurred. In addition, the article questions the conventional wisdom that Regulation Q was the primary cause of the 1960s credit crunches.

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