Advanced Search
MyIDEAS: Login

Imports and the Jacksonian Economy: The Business Cycle and the Balance of Payments

Contents:

Author Info

  • T. J. O. Dick
  • John E. Floyd

Abstract

Anglo-American financial interrelations in the decades before the American Civil War have long been studied to understand better the business cycle phenomena surrounding the demise of the Second Bank of the United States and the victory of the Currency School over the Bank of England in 1844. Inasmuch as gold and silver discoveries, their mining, and their monetization were also features of the period, the price-specie-flow theory of balance of payments adjustment has been at the center of many attempts to explain the propagation and transmission of business cycles. By contrast, we show that the remarkable international mobility of capital holds the key to the connection between the balance of payments and business cycles. A portfolio approach to balance of payments adjustment is developed and found to be more consistent than price-specie-flow theory with basic macroeconomic aggregates for the the 1820-60 period. To the extent that money supply shocks account for the cycle, their influence is limited to their impact made via changes in the world money stock. Because individual country price levels under the prevailing metallic and bimetallic standards are defined relative to the world price level, they depend on both the world money stock and real market forces that distinguish one country from another. Money supply shocks relative to world money stocks do not appear to have been large enough to account for the magnitude of cycles in this period, suggesting the possibility that cycles could have been dominated by real shocks.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.economics.utoronto.ca/public/workingPapers/UT-ECIPA-FLOYD-01-01.pdf
File Function: MainText
Download Restriction: no

File URL: http://www.economics.utoronto.ca/public/workingPapers/UT-ECIPA-FLOYD-01-01.ps
File Function: MainText
Download Restriction: no

Bibliographic Info

Paper provided by University of Toronto, Department of Economics in its series Working Papers with number floyd-01-01.

as in new window
Length: 52 pages
Date of creation: 04 Mar 2001
Date of revision:
Handle: RePEc:tor:tecipa:floyd-01-01

Contact details of provider:
Postal: 150 St. George Street, Toronto, Ontario
Phone: (416) 978-5283

Related research

Keywords: gold standard; international capital mobility; money; prices; cycles;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:tor:tecipa:floyd-01-01. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (RePEc Maintainer).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.