Fiscal discriminations in three wars

George Hall and Thomas Sargent

Journal of Monetary Economics, 2014, vol. 61, issue C, 148-166

Abstract: In 1790, a U.S. paper dollar was widely held in disrepute (something shoddy was not ‘worth a Continental’). By 1879, a U.S. paper dollar had become ‘as good as gold’. These outcomes emerged from how the U.S. federal government financed three wars: the American Revolution, the War of 1812, and the Civil War. In the beginning, the U.S. government discriminated greatly in the returns it paid to different classes of creditors; but that pattern of discrimination diminished over time in ways that eventually rehabilitated the reputation of federal paper money as a store of value.

Keywords: Repudiation; Reputation; Discrimination; Legal tender; Greenbacks; Alexander Hamilton; Albert Gallatin; Ulysses S. Grant (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (22)

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Working Paper: Fiscal Discriminations in Three Wars (2013)
Working Paper: Fiscal Discriminations in Three Wars (2013)
Working Paper: Fiscal Discriminations in Three Wars
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:61:y:2014:i:c:p:148-166

DOI: 10.1016/j.jmoneco.2013.09.002

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