Suppressing Asset Price Inflation: The Confederate Experience, 1861-1865
AbstractConfederate monetary reforms encouraged holders of Treasury notes to exchange these notes for bonds by imposing deadlines on their convertibility. We show that Confederate funding acts aimed at precipitating the conversion of currency into bonds did temporarily suppress currency depreciation. These acts also triggered upsurges in commodity prices, however, as note holders rushed to spend the currency before their exchange rights were reduced. Asset price stabilization policies seem to have increased the velocity of circulation and counterproductively channeled inflationary pressures into other areas of the economy.
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Date of creation: Sep 2002
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- Richard C. K. Burdekin & Marc D. Weidenmier, 2003. "Suppressing Asset Price Inflation: The Confederate Experience, 1861--1865," Economic Inquiry, Western Economic Association International, vol. 41(3), pages 420-432, July.
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- N21 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: Pre-1913
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