Bank Runs & Unemployment: A Brief History and the Effect on the Average American

In 2023, over 500 billion dollars were lost in bank runs. Bank runs are an age-old economic issue that remains pervasive in today’s economy. Bank runs do not only affect bank members but can also affect its employees, those employees’ families, and potentially the entire economy. To better understand this effect, this paper aims to investigate how various bank runs across U.S. history have impacted average citizens. The Panic of 1907, The Great Depression, and The Great Recession of 2008 will be uncovered. By analyzing these events, other previous studies, and by compiling graphs with public economic data, this paper hopes to shed light on the potential correlation between bank runs and economic indices such as unemployment rates, inflation rates, and CPI. By leveraging these indices, it can be discovered if bank runs affect the common person’s life and to what extent. Further goals of this analysis are to increase awareness about the effects of bank runs, as well as the challenges that they present for the common/average person. At the conclusion of this study, it was evident that bank runs may have negative effects on the average/common person due to their unpredictability, wide reach, and echoing effects.