The career you ended up with a decade later basically depended on whether your local Federal Reserve bank was aggressive or lazy back in 1930.
March 25, 2026
Original Paper
Lender of Last Resort and Local Economic Outcomes
SSRN · 6456974
The Takeaway
By comparing counties on either side of a Fed district border, researchers found that aggressive liquidity support didn't just save banks; it permanently altered the local labor market. Workers in 'saved' areas were significantly more likely to remain in high-paying manufacturing jobs and less likely to be forced into migration ten years after the initial crisis.
From the abstract
This paper studies the long-run labor market consequences of lender-of-last-resort (LLR) intervention during the Great Depression. I exploit a natural experiment created by the Federal Reserve district border separating counties under the jurisdiction of the Atlanta and St. Louis Federal Reserve Banks. During the banking panic of 1930, the Atlanta Fed aggressively extended liquidity to distressed banks, while the St. Louis Fed largely refrained from intervention. Using newly digitized county-lev