ECON 2200 Lecture Notes - Lecture 13: Monetary System, Free Silver
ECON 2200
Lecture 13
The Monetary System
A. Following the Civil War, money included
• SB notes
• NB notes
• Greenbacks
• Demand deposits
• Coins (bimetallic standard)
B. Dominant issue of late 1800s: What kind of monetary system should
U.S. have?
As we consider this issue, remember:
• Quantity Theory of Money (Econ Insight 19.1)
C. Greenbacks & Gold
• Wartime inflation meant
o U.S. prices > International prices
o Gold flowed out of U.S.
o Payment of specie (gold) suspended
o Impact of deflation
▪ borrowers (especially farmers)
▪ lenders (especially U.S. bondholders)
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