Politics on the road to the U.S. monetary union
Peter Rousseau ()
No 13-00006, Vanderbilt University Department of Economics Working Papers from Vanderbilt University Department of Economics
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.
Keywords: colonial currency; Bank of the United States; Jacksonian monetary policy; free banking; National Banking System; Federal Reserve System (search for similar items in EconPapers)
JEL-codes: N1 N2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-his, nep-mon and nep-pol
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