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Bruce Champ |

Senior Research Economist

Bruce Champ, Senior Research Economist

Bruce Champ was formerly a senior research economist in the Research Department of the Federal Reserve Bank of Cleveland. His principal fields of activity are monetary theory and monetary history. He applies modern models of money to explain episodes in monetary history. His current research interests are explaining seasonal movements in interest rates and interbank fund flows during the period of the U.S. national banking system.

Dr. Champ has a B.S. in economics and mathematics from the University of Iowa and a Ph.D. in economics from the University of Minnesota.

  • Fed Publications
  • Other Publications
Title Date Publication Author(s) Type

 

 April 2008 Federal Reserve Bank of Cleveland, Economic Commentary ; Economic Commentary
Abstract: Substitutes for government-issued money are produced and used from time to time even in countries like the United States. Understanding why people turn to these substitutes and to what degree they are successful—or not—can teach us a lot about the elements essential to a well-functioning currency.
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 December, 2007 Federal Reserve Bank of Cleveland, Working Paper no. 0723R ; Working Papers
Abstract: During the period of the National Banking System (1863-1913), national banks could issue bank notes backed by holdings of eligible U.S. government securities. This paper presents an overview of the legal and financial history of this period. It begins with the reasons the National Banking System was created. It also examines the rules of operation for national banks as established by the National Banking Act and its subsequent revisions. Furthermore, the paper serves as a brief financial history of the period, examining the various forces that shaped the environment in which national banks operated. This paper represents a preliminary chapter from a forthcoming monograph on the period of the National Banking System. Other chapters of the monograph appear in the Federal Reserve Bank of Cleveland's working paper series as working paper 07-19R and working paper 07-22R.
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 December, 2007 Federal Reserve Bank of Cleveland, Working Paper no. 0722R ; Working Papers
Abstract: The era of the National Banking System (1863-1913) has been a puzzling one for monetary theorists and economic historians for well over a century. The puzzles associated with this period take various forms. Despite calculations of high profit rates on note issue for certain periods of the era, national banks never fully utilized their note-issuing powers. Relatedly, the behavior of interest rates during the period is also puzzling given the regime of bank note issuance put in place by the National Bank Acts. On the surface, it appears that an arbitrage condition is broken. The observed inelasticity in aggregate national bank note issue also is puzzling, particularly given the behavior of interest rates. This paper examines many of the puzzles of the national banking era and provides a summary of the current attempts to explain those puzzles. This paper represents a preliminary chapter from a forthcoming monograph on the period of the National Banking System. Other chapters of the monograph appear in the Federal Reserve Bank of Cleveland's working paper series as working paper 07-19R and working paper 07-23R.
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 December, 2007 Federal Reserve Bank of Cleveland, Working Paper no. 0719R ; Working Papers
Abstract:

This paper provides a summary of the main features of U.S. financial and banking data during the period of the National Banking System (1863–1914). The purpose of the paper is to provide an overview of the stylized facts associated with the era, with an emphasis on those impinging on national bank behavior. The paper takes a detailed look at key elements of national bank balance sheets over time, over the seasons, and during panic periods. The interesting and puzzling patterns of interest rate movements during the era also are examined. The paper introduces a new set of disaggregated data on the national bank era that has not been examined by prior research. As data are presented in the paper, some of the key puzzles associated with the era are introduced.

This paper represents a preliminary chapter from a forthcoming monograph on the period of the National Banking System. Other chapters of the monograph appear in the Federal Reserve Bank of Cleveland's working paper series as working paper 07-22R and working paper 07-23R.
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 January 1, 2007 Federal Reserve Bank of Cleveland, Economic Commentary ; Economic Commentary
Abstract: The government isn't the only entity allowed to issue money. Private citizens and businesses can too, and throughout U.S. history, they often have. But private money--as such money is called--isn't issued much these days. What lessons have our experiences with private money taught us, and what do they imply for our money today and in the future?
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 December, 2006 Federal Reserve Bank of Cleveland, Working Paper no. 0622 ; James B Thomson; Working Papers
Abstract: From 1883 to 1892, the circulation of national bank notes in the United States fell nearly 50 percent. Previous studies have attributed this to supply-side factors that led to a decline in the profitability of note issue during this period. This paper provides an alternative explanation. The decline in note issue was, in large part, demand-driven. The presence of a competing currency with superior features caused the public to substitute away from national bank notes.
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 May 15, 2006 Federal Reserve Bank of Cleveland, Economic Commentary ; John Boyd; Economic Commentary
Abstract: The world has seen a dramatic decline in inflation rates in recent decades, but concerns about inflation may still be warranted, especially in some countries. Evidence is mounting that inflation is harmful to economic activity even at fairly modest rates of inflation because of the way it adversely affects the banking sector and investment.
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 December, 2003 Federal Reserve Bank of Cleveland, Working Paper no. 0317 ; John Boyd; Working Papers
Abstract: The last decade has witnessed a great deal of theoretical and empirical research on the relationships between inflation, financial market performance, and economic growth. This paper provides a survey of that literature and presents new cross-country empirical results on this topic. We find that inflation is negatively associated with banking industry size, real returns on financial assets, and bank profitability. We also discover a positive relationship between asset return volatility and inflation.
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 December, 2003 Federal Reserve Bank of Cleveland, Working Paper no. 0316 ; Neil Wallace; Working Papers
Abstract: Under the National Banking System, 1863-1914, national banks that deposited sufficient collateral could issue notes provided they paid a tax on notes in circulation: 1 percent per year before 1900 and 1/2 percent thereafter. Because note issue was far below the allowed maximum, an arbitrage argument predicts that short-term nominal interest rates should have been bounded above by the tax rate. They were not. That is the note-issue puzzle. Our resolution takes the form of a model in which notes play a role, but in which the profitability of note issue is not tied to anything that resembles a market rate of interest.
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 February 15, 2003 Federal Reserve Bank of Cleveland, Economic Commentary ; Economic Commentary
Abstract: The terrorist attacks of 9/11 triggered a staggering increase in demand for U.S. dollars all over the world, a demand that threatened to disrupt the American payments system but was met swiftly and successfully by the Federal Reserve. Earlier in the nation’s history, the system didn't respond so well to severe shocks. This Commentary describes financial crises that occurred during one period in which the country had no central bank.
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 June 2002 Federal Reserve Bank of Cleveland, Economic Commentary ; Michael F Bryan; Economic Commentary
Abstract: The Federal Reserve System is America’s uneasy compromise between our wariness of concentrated financial power and our desire to promote efficiency in our national payments system. In fact, the Federal Reserve is the nation’s third attempt to establish a large national bank—what we now call a central bank— that is in a unique position to influence a nation’s money and credit. This Commentary retells the story of the rise and fall of the two earlier national banks, both named the Bank of the United States.
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 June 2000 Federal Reserve Bank of Cleveland, Economic Commentary ; Michael F Bryan; Jennifer K Ransom; Economic Commentary
Abstract: Alexander Hamilton is the least known and most misunderstood of our nation’s founders. His contributions include creating a monetary standard, establishing our banking system, and ensuring the young nation’s creditworthiness. This Economic Commentary explains how much of our financial strength we owe to Hamilton.
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Resolving the National Bank Note Paradox

 

 April 1, 1992 Federal Reserve Bank of Minneapolis Quarterly Review, Spring 1992, pp. 13-21 ; Neil Wallace; Warren E Weber; Economic Review
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Title Date Publication Author(s) Type
Modeling Monetary Economies

 

 2001 Second edition. Cambridge; New York and Melbourne: Cambridge University Press, 2001. ; Scott Freeman; Textbook
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Redemption costs and interest rates under the U.S. National Banking System

 

 August 1999 Journal of Money, Credit, and Banking, vol. 31, no. 3, part 2, pp. 568-595 ; Scott Freeman; Warren E Weber; Journal Article
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Currency Elasticity and Banking Panics: Theories and Evidence

 

 November 1, 1996 Canadian Journal of Economics, vol. 29, no. 4, November 1996, pp. 828-64 ; Bruce D Smith; Stephen D Williamson; Journal Article
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Interest Rates under the U.S. National Banking System

 

 December 1, 1994 Journal of Monetary Economics, vol. 34, no. 3, December 1994, pp. 343-58 ; Neil Wallace; Warren E Weber; Journal Article
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Money, Output, and the Nominal National Debt

 

 May 1, 1990 American Economic Review, vol. 80, no. 3, June 1990, pp. 390-97 ; Scott Freeman; Journal Article
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