Interest-Bearing Currency and Legal Restrictions Theory: Lessons from the Southern Confederacy
Instances of interest-bearing currency are relatively rare. The Southern Confederacy issued both interest and non-interest-bearing notes during the Civil War. The two types of notes apparently circulated alongside one another with the interest-bearing currency generally commanding the premium implied by legal restrictions theory. Government-imposed restrictions on banks prevented the non-interest-bearing notes from being driven out of circulation. The Southern experience appears to be consistent with the legal restrictions theory of money and suggests a potential role for interest-bearing currency as a circulating medium.
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (909) 607-3041
Fax: (909) 621-8249
Web page: http://www.claremontmckenna.edu/rdschool/papers/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Cowen, Tyler & Kroszner, Randall, 1989. "Scottish Banking before 1845: A Model for Laissez-Faire?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 21(2), pages 221-31, May.
- Richard C. K. Burdekin & Marc D. Weidenmier, 2003.
"Suppressing Asset Price Inflation: The Confederate Experience, 1861--1865,"
Western Economic Association International, vol. 41(3), pages 420-432, July.
- Marc D. Weidenmier & Richard C.K. Burdekin, 2002. "Suppressing Asset Price Inflation: The Confederate Experience, 1861-1865," NBER Working Papers 9230, National Bureau of Economic Research, Inc.
- Gherity, James A, 1993. "Interest-Bearing Currency: Evidence from the Civil War Experience: A Note," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 25(1), pages 125-31, February.
- Gorton, Gary, 1996. "Reputation Formation in Early Bank Note Markets," Journal of Political Economy, University of Chicago Press, vol. 104(2), pages 346-97, April.
- Makinen, Gail E & Woodward, G Thomas, 1999. "Use of Interest-Bearing Currency in the Civil War: The Experience below the Mason-Dixon Line," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 31(1), pages 121-29, February.
- Neil Wallace, 1983. "A legal restrictions theory of the demand for "money" and the role of monetary policy," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Win.
- White, Lawrence H., 1985.
"Accounting for Non-Interest-Bearing Currency: A Critique of the ‘Legal Restrictions’ Theory of Money,"
85-35, C.V. Starr Center for Applied Economics, New York University.
- White, Lawrence H, 1987. "Accounting for Non-interest-Bearing Currency: A Critique of the Legal Restrictions Theory of Money," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 19(4), pages 448-56, November.
- Richard C.K. Burdekin & Marc D. Weidenmier, .
"Inflation is Always and Everywhere a Monetary Phenomenon: Richmond vs. Houston in 1864,"
Claremont Colleges Working Papers
1999-31, Claremont Colleges.
- Richard C. K. Burdekin & Marc D. Weidenmier, 2001. "Inflation Is Always and Everywhere a Monetary Phenomenon: Richmond vs. Houston in 1864," American Economic Review, American Economic Association, vol. 91(5), pages 1621-1630, December.
When requesting a correction, please mention this item's handle: RePEc:clm:clmeco:1999-14. 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: ()
If references are entirely missing, you can add them using this form.