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Could the United States have had a better central bank? An historical counterfactual speculation

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  • Bordo, Michael D.

Abstract

This article argues that two alternative hypothetical central bank scenarios could have improved upon the Federal Reserve’s track record with respect to financial stability and possibly overall macroeconomic performance in its first century. The first scenario is to assume that the charter of the Second Bank of the United States had not been revoked by Andrew Jackson in 1836 and the Second Bank survived. The second scenario takes as given that the Second bank did not survive and history evolved as it did , but considers the situation in which the Federal Reserve Act of 1913 was closer to the original plan for a central bank proposed by Paul Warburg in 1910.

Suggested Citation

  • Bordo, Michael D., 2012. "Could the United States have had a better central bank? An historical counterfactual speculation," Journal of Macroeconomics, Elsevier, vol. 34(3), pages 597-607.
  • Handle: RePEc:eee:jmacro:v:34:y:2012:i:3:p:597-607 DOI: 10.1016/j.jmacro.2012.02.009
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    References listed on IDEAS

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    Cited by:

    1. Peter L. Rousseau, 2013. "Politics on the road to the U.S. monetary union," Vanderbilt University Department of Economics Working Papers 13-00006, Vanderbilt University Department of Economics.
    2. Bordo, Michael D., 2014. "Rules for a lender of last resort: An historical perspective," Journal of Economic Dynamics and Control, Elsevier, vol. 49(C), pages 126-134.

    More about this item

    Keywords

    Federal Reserve; Second Bank of the United States; Warburg Plan; Gold standard; Lender of last resort;

    JEL classification:

    • N11 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: Pre-1913
    • N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-
    • N21 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: Pre-1913
    • N22 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: 1913-

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