Federal Reserve reserve requirement increases of 1936–1937

E537705

monetary policy action monetary tightening episode reserve requirement change

The Federal Reserve reserve requirement increases of 1936–1937 were a series of monetary tightening measures that sharply raised banks’ required reserves, contributing to a contraction in credit and the subsequent 1937–1938 recession in the United States.

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Statements (46)

Predicate	Object
instanceOf	monetary policy action ⓘ monetary tightening episode ⓘ reserve requirement change ⓘ
academicDiscipline	economic history ⓘ macroeconomics ⓘ monetary economics ⓘ
appliedBy	Board of Governors of the Federal Reserve System NERFINISHED ⓘ Federal Reserve System NERFINISHED ⓘ
appliesTo	Federal Reserve member banks NERFINISHED ⓘ demand deposits ⓘ time deposits ⓘ
chronology	followed the banking reforms of 1933–1935 ⓘ preceded the 1937–1938 recession ⓘ
comparedTo	Federal Reserve policy tightening episodes in later recessions ⓘ
contributedTo	Recession of 1937–1938 NERFINISHED ⓘ
country	United States of America ⓘ surface form: United States
describedIn	A Monetary History of the United States, 1867–1960 NERFINISHED ⓘ
endTime	1937 ⓘ
evaluatedBy	Anna J. Schwartz NERFINISHED ⓘ Milton Friedman NERFINISHED ⓘ
hasEffect	contraction in bank credit ⓘ decline in the money supply ⓘ downturn in industrial production ⓘ increase in required reserves of member banks ⓘ increase in reserve-deposit ratios ⓘ monetary tightening ⓘ reduction in excess reserves ⓘ rise in unemployment in 1937–1938 ⓘ tightening of lending conditions ⓘ
hasInterpretation	example of premature monetary tightening ⓘ policy mistake contributing to the 1937–1938 downturn ⓘ
historicalPeriod	Great Depression NERFINISHED ⓘ
implementedUnder	New Deal era economic policy environment ⓘ
location	United States banking system ⓘ
motivatedBy	concerns about excessive bank reserves ⓘ concerns about potential future inflation ⓘ
partOf	United States monetary policy in the 1930s ⓘ
policyInstrument	reserve requirement ratio ⓘ
policyType	contractionary monetary policy ⓘ
regulates	member bank reserve ratios ⓘ
relatedTo	Banking Act of 1935 NERFINISHED ⓘ Great Depression in the United States NERFINISHED ⓘ U.S. business cycle of the late 1930s ⓘ
startTime	1936 ⓘ
subjectOf	research on the causes of the 1937–1938 recession ⓘ
timePeriod	interwar period ⓘ

Referenced by (1)

Full triples — surface form annotated when it differs from this entity's canonical label.

Recession of 1937–1938 → significantEvent → Federal Reserve reserve requirement increases of 1936–1937 ⓘ