INFORMATION-BASED BANK RUNS IN A MONETARY ECONOMY

This paper offers a general equilibrium model of banking that is capab le of confronting a number of ''stylized facts'' from the 1929-1933 pe riod of U.S. banking history. In the model, flat currency is part of t he bank's portfolio, banks are subject to an explicit sequential servi ce constraint, and bank runs are information-based. After describing t he bank's problem and defining an equilibrium, a simulation of the eco nomy's equilibrium is provided. Key features of the simulation are sho wn to be consistent with the ''stylized facts.''