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David Ignatius's interview with Ben Bernanke contains this validating nugget:

Bernanke recommended studies by Gary Gorton, a Yale economist who has analyzed the ways the recent panic resembled those of the late 19th century. In his latest paper, "Slapped in the Face by the Invisible Hand," Gorton explains that the long-ago panics typically came at the height of the business cycle and involved new information that frightened depositors into withdrawing their money. Such bank panics disappeared for nearly 75 years after the enactment of federal deposit insurance in 1934.

Validating for me, at least. Gorton's paper has been in the think tank box -- left sidebar, for those reading this on the actual homepage -- all week. But if you missed it, you can download the study here.

By Ezra Klein  |  May 28, 2009; 3:00 PM ET
Categories:  Federal Reserve  
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Next: Bill Clinton and the Housing Bubble

Comments

Um, yea...Bernanke should probably stop citing Gorton so proudly: http://online.wsj.com/article/SB122538449722784635.html

Posted by: TonyTheTurtle | May 28, 2009 4:43 PM | Report abuse

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