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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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Bibliographic Info

Paper provided by School of Business Administration, American University of Sharjah in its series Economics Working Papers with number 01-03/2013.

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Length: 41 pages
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Handle: RePEc:sha:ecowps:01-03/2013

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Web page: http://www.aus.edu/sba
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Keywords: repudiation; reputation; discrimination; legal tender; greenbacks; Alexander Hamilton; Albert Gallatin; Ulysses S. Grant;

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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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