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

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  • Peter L. Rousseau

    () (Vanderbilt University)

Abstract

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.

Suggested Citation

  • 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.
  • Handle: RePEc:van:wpaper:vuecon-sub-13-00006
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    References listed on IDEAS

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    1. Bray Hammond, 1936. "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy, University of Chicago Press, vol. 44, pages 184-184.
    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. Matthew Jaremski & Peter L. Rousseau, 2013. "Banks, Free Banks, And U.S. Economic Growth," Economic Inquiry, Western Economic Association International, vol. 51(2), pages 1603-1621, April.
    4. 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.
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    6. Farley Grubb, 2011. "State Redemption of the Continental Dollar, 1779-1790," NBER Working Papers 17209, National Bureau of Economic Research, Inc.
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    8. 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.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. “A fluid, ever-evolving, and organic process of improvement, misstep and improvement”: The Long Road to Monetary Union in the USA
      by Manuel Bautista in NEP-HIS blog on 2013-08-08 04:19:48

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    Cited by:

    1. Vincent Bignon & Régis Breton & Mariana Rojas Breu, 2015. "Monetary Union with a Single Currency and Imperfect Credit Market Integration," FIW Working Paper series 153, FIW.

    More about this item

    Keywords

    colonial currency; Bank of the United States; Jacksonian monetary policy; free banking; National Banking System; Federal Reserve System;

    JEL classification:

    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations
    • N2 - Economic History - - Financial Markets and Institutions

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