Essays on Banking, Credit, and Money, and their relationship to Output, Population, and Productivity
This thesis studies instances of credit constraints in Canadian history. In Chapter 2, I study the productivity of Canadian industrial establishments in late nineteenth century Canada. In particular, I look at the relationship between the perceived credit worthiness of proprietors of industrial establishments, capital accumulation, and productivity. I show that the productivity gap of 22-38%, between Ontario and Quebec, that existed in 1871, could have been reduced by between a quarter and three quarters if francophone-Catholics had received the same credit ratings as anglophone-non-Catholics. In Chapter 3, co-authored with David Rosé, we study the entry of French Canadian credit unions, caisses populaires, into rural Quebec over the 1911 to 1931 period. Using propensity score matching methods, we showed that the caisses populaires slowed down rural exodus. Sub-districts where a caisse was established exhibited 7-9% higher population growth--total, rural, and French--compared to sub-districts where no caisse was established. In Chapter 4, co-authored with Gregor W. Smith, we look for evidence of a correlation between output growth and inflation, or unexpected inflation, during the interwar period, which featured an abundance of credit, followed by a credit crunch. Using time-series and panel data methods for more than 20 countries, including Canada, we find little evidence of a correlation between unexpected inflation and output growth.