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Fiscal Discriminations in Three Wars

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  • George J. Hall
  • Thomas J. Sargent

Abstract

In 1790, a U.S. paper dollar was widely held in disrepute (something shoddy was not ‘worth a Continental’). By 1879, a U.S. paper dollar had become ‘as good as gold.’ These outcomes emerged from how the U.S. federal government financed three wars: the American Revolution, the War of 1812, and the Civil War. In the beginning, the U.S. government discriminated greatly in the returns it paid to different classes of creditors; but that pattern of discrimination diminished over time in ways that eventually rehabilitated the reputation of federal paper money as a store of value.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19008.

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Date of creation: May 2013
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Publication status: published as Hall, George J. & Sargent, Thomas J., 2014. "Fiscal discriminations in three wars," Journal of Monetary Economics, Elsevier, vol. 61(C), pages 148-166.
Handle: RePEc:nbr:nberwo:19008

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Hall and Sargent: Fiscal Prioritization: Lessons from Three Wars
    by Mark Thoma in Economist's View on 2013-05-18 17:49:18

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