The Economics of Market Coordination for the Check-Clearing System in the Late 19th Century United States

By Howard H. Chang on March 17, 2011

Howard H. Chang, Principal at Global Economics Group, Marina Danilevsky, Dr. David S. Evans, Chairman of Global Economics Group, and Daniel D. Garcia-Swartz, provide an example of how institutions develop to solve complex coordination problems among businesses in the late 19th Century United States. In The Economics Of Market Coordination For The Check-Clearing System In The Late 19th Century United States, (Explorations in Economic History, 2008), these authors analyze a 1910 check remittance register from the State National Bank of Bloomington, Illinois. They conclude that the bank followed an orderly process of check remittance according to which checks tended to move in the right direction. This casts doubts on the alleged pervasiveness of cycling and circuitous routing of an extreme nature in the pre-Fed check-clearing process. The Economics of Market Coordination for the Check-Clearing System in the Late 19th Century United States

About the Author

Name
Howard H. Chang
Title/Location
Principal, Chicago
Phone
312-533-4602
Expertise
Antitrust/Competition Policy, Financial Regulation