State 'Currencies' and the Transition to the U.S. Dollar: Clarifying Some Confusions

54 Pages Posted: 23 Jan 2004

See all articles by Ronald W. Michener

Ronald W. Michener

University of Virginia - Department of Economics

Robert E. Wright

American Institute for Economic Research

Date Written: 2004

Abstract

If they could be believed, Farley W. Grubb's recent papers on the early U.S. monetary system would be important contributions to scholarship and public policy. This paper shows, however, that Grubb's papers should not be believed. Grubb's key assumption, that the medium of exchange can be inferred from the unit of account, is erroneous, rendering his data analyses nugatory. State-issued bills of credit did not play the role Grubb attributes to them in the years after 1781, when most Americans had eschewed government paper money in favor of full bodied coins and convertible bank liabilities. Bankers did not foist the Constitutional clause banning state emissions onto an unsuspecting public.

Keywords: Monetary union, exchange rates, United States of America, Pennsylvania, history

JEL Classification: N110, N210, N410, E590

Suggested Citation

Michener, Ronald W. and Wright, Robert Eric, State 'Currencies' and the Transition to the U.S. Dollar: Clarifying Some Confusions (2004). Available at SSRN: https://ssrn.com/abstract=488907 or http://dx.doi.org/10.2139/ssrn.488907

Ronald W. Michener

University of Virginia - Department of Economics ( email )

P.O. Box 400182
Charlottesville, VA 22904-4182
United States

Robert Eric Wright (Contact Author)

American Institute for Economic Research ( email )

PO Box 1000
Great Barrington, MA 01230
United States
6053709610 (Phone)

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