Abstract
This study examines the debates surrounding interstate banking reform in the 1980s and the effect of geographic deregulation on the availability of credit in the states. Deregulation does have a significant and positive impact on the amount of total commercial and industrial loans made by banks. The pro and con arguments about deregulation are then reconsidered in light of this finding. The study concludes that states can help stimulate economic growth through regulatory policy, though the total impact is relatively small. This research also suggests that the veracity of policy arguments can be judged by the richness of the institutional context in which they are grounded.
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