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Politics on the road to the U.S. monetary union

  • Peter L. Rousseau

    ()

    (Vanderbilt University)

Is political unity a necessary condition for a successful monetary union? The early United States seems a leading example of this principle. But the view is misleadingly simple. I review the historical record and uncover signs that the United States did not achieve a stable monetary union, at least if measured by a uniform currency and adequate safeguards against systemic risk, until well after the Civil War and probably not until the founding of the Federal Reserve. Political change and shifting policy positions end up as key factors in shaping the monetary union that did ultimately emerge.

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Paper provided by Vanderbilt University Department of Economics in its series Vanderbilt University Department of Economics Working Papers with number 13-00006.

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Date of creation: 25 Mar 2013
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Handle: RePEc:van:wpaper:vuecon-sub-13-00006
Contact details of provider: Web page: http://www.vanderbilt.edu/econ/wparchive/index.html

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  1. Peter L. Rousseau & Richard Sylla, 2000. "Emerging Financial Markets and Early U.S. Growth," Econometric Society World Congress 2000 Contributed Papers 1254, Econometric Society.
  2. Rousseau, Peter L., 2002. "Jacksonian Monetary Policy, Specie Flows, And The Panic Of 1837," The Journal of Economic History, Cambridge University Press, vol. 62(02), pages 457-488, June.
  3. Peter L. Rousseau, 2004. "A Common Currency: Early U.S. Monetary Policy and the Transition to the Dollar," NBER Working Papers 10702, National Bureau of Economic Research, Inc.
  4. 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.
  5. Grubb, Farley, 2008. "The Continental Dollar: How Much Was Really Issued?," The Journal of Economic History, Cambridge University Press, vol. 68(01), pages 283-291, March.
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  7. Sylla, Richard, 2002. "Financial Systems And Economic Modernization," The Journal of Economic History, Cambridge University Press, vol. 62(02), pages 277-292, June.
  8. Calomiris, Charles W., 1988. "Institutional Failure, Monetary Scarcity, and the Depreciation of the Continental," The Journal of Economic History, Cambridge University Press, vol. 48(01), pages 47-68, March.
  9. Cowen, David J., 2000. "The First Bank of the United States and the Securities Market Crash of 1792," The Journal of Economic History, Cambridge University Press, vol. 60(04), pages 1041-1060, December.
  10. Van Fenstermaker, J., 1965. "The Statistics of American Commercial Banking, 1782–1818," The Journal of Economic History, Cambridge University Press, vol. 25(03), pages 400-413, September.
  11. 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.
  12. Farley Grubb, 2011. "State Redemption of the Continental Dollar, 1779-1790," NBER Working Papers 17209, National Bureau of Economic Research, Inc.
  13. Matthew Jaremski, 2010. "Free Bank Failures: Risky Bonds versus Undiversified Portfolios," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 42(8), pages 1565-1587, December.
  14. Matthew Jaremski & Peter L. Rousseau, 2012. "Banks, Free Banks, and U.S. Economic Growth," NBER Working Papers 18021, National Bureau of Economic Research, Inc.
  15. Weber, Warren E., 2006. "Early State Banks in the United States: How Many Were There and When Did They Exist?," The Journal of Economic History, Cambridge University Press, vol. 66(02), pages 433-455, June.
  16. Wettereau, James O., 1942. "The Branches of the First Bank of the United States," The Journal of Economic History, Cambridge University Press, vol. 2(S1), pages 66-100, December.
  17. Thomas J. Sargent, 2012. "Nobel Lecture: United States Then, Europe Now," Journal of Political Economy, University of Chicago Press, vol. 120(1), pages 1 - 40.
  18. Mitchel Y. Abolafia (ed.), 2005. "Markets," Books, Edward Elgar, number 2788, Autumn.
  19. Rolnick, Arthur J & Weber, Warren E, 1983. "New Evidence on the Free Banking Era," American Economic Review, American Economic Association, vol. 73(5), pages 1080-91, December.
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