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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. Matthew Jaremski & Peter L. Rousseau, 2012. "Banks, Free Banks, and U.S. Economic Growth," NBER Working Papers 18021, National Bureau of Economic Research, Inc.
  2. 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.
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  4. 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.
  5. 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.
  6. Peter L. Rousseau, 2000. "Jacksonian Monetary Policy, Specie Flows, and the Panic of 1837," NBER Working Papers 7528, National Bureau of Economic Research, Inc.
  7. Rousseau, Peter L. & Sylla, Richard, 2005. "Emerging financial markets and early US growth," Explorations in Economic History, Elsevier, vol. 42(1), pages 1-26, January.
  8. Sylla, Richard, 1969. "Federal Policy, Banking Market Structure, and Capital Mobilization in the United States, 1863–1913," The Journal of Economic History, Cambridge University Press, vol. 29(04), pages 657-686, December.
  9. 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.
  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. 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.
  12. Farley Grubb, 2007. "The Continental Dollar: How Much Was Really Issued ?," Working Papers 07-09, University of Delaware, Department of Economics.
  13. 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.
  14. 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.
  15. 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.
  16. 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.
  17. Sylla, Richard, 2002. "Financial Systems And Economic Modernization," The Journal of Economic History, Cambridge University Press, vol. 62(02), pages 277-292, June.
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