The focus of this course is on American
Monetary and Financial History. The course will take a macroeconomic rather
than the traditional microeconomic approach to the study of economic history.
The methodology of the course is to apply modern tools of monetary and
macroeconomic theory to important historical issues. The introduction of
theoretical tools and historical data can shed new light on controversies
of the past and yield new insights for today's economic problems. Although
the course focuses on primarily monetary phenomenon, it will be embedded
in an overview of the growth and development of the American Economy from
the eighteenth to the twentieth centuries.
There will be three class quizzes, credit will be given for the TWO best. The quizzes will be worth 40% of the grade. There will also be a final examination, which will cover the entire course, worth 60%.
Textbooks
M. Friedman and A. J. Schwartz. A Monetary
History of the United States 1869 to 1960,
Princeton University Press, 1970.
G.M. Walton and H. Rockoff. History of
the American Economy: Eighth Edition. Harcourt Brace Jovanovich.
M. Friedman. Money Mischief: Episodes
in Monetary History, Harcourt Brace Jovanovich, 1992.
R. L. Greenfield. (1994), Monetary Policy
and the Depressed Economy: As Illustrated by the Period 1929-1933. Wadsworth.
P. Temin. The Jacksonian Economy. W.W.
Norton, 1969.
P. Temin. Did Monetary Forces Cause the
Great Depression. W.W. Norton, 1976.
1. Background: Macro versus Micro
Economic History // The Background of American Economic Growth.
Required Reading
R. Fogel and S. Engerman. (1972), The
Reinterpretation of American Economic Growth. Harper and Row, Chapter 1.
M. D. Bordo. (1986) "Explorations in
Monetary History", Explorations in Economic History.
pp. 339-345. October.
Walton and Rockoff, History of the American
Economy: Eighth Edition. Chapter 1.
Supplementary Reading
M. Friedman and A. J. Schwartz. (1963),
A Monetary History of the United States, 1897 to 1960, Princeton University
Press, Chapters 1 and 13.
D. North, T. L. Anderson and P. J. Hill,
Growth and Welfare in the American Past: A New Economic History,
Prentice Hall.
2. Colonial Monetary Regimes
Required Reading
Walton and Rockoff, History of the American
Economy: Eighth Edition. Chapter 4.
B. Smith. (1985), "Some Colonial Evidence
on Two Theories of Money: Maryland and the Carolinas." Journal of Political
Economy, 93, 1178-1211.
R. Michener. (1987), "Colonial Money
and the Quantity Theory," Carnegie Rochester Conference Series in Public
Policy, November.
B. McCallum, "Money and Prices in Colonial
American: A New Test of Competing Theories," Journal of Political Economy,
February 1992.
Supplementary Reading
M. D. Bordo and I Marcotte. (1987), "Purchasing
Power Parity in Colonial America: Some Evidence for South Carolina 1732-1774."
Carnegie Rochester Conference Series in Public Policy, November.
B. Smith. (1985), "American Colonial
Monetary Regimes: The Failure of the Quantity Theory and Some Evidence
in Favor of an Alternate View," Canadian Journal of Economics, 18, 531-565.
R. Weiss. (1970), "The Issue of Paper
Money in the American Colonies, 1720-1774." Journal of Economic History,
30, 770-784.
R. C. West. (1978), "Money in the Colonial
American Economy," Economic Inquiry, XVI. 1-15.
E. Wicker. (1985), "Colonial Monetary
Standards Contrasted: Evidence from the Sevens Year War." Journal of Economic
History, XLV, 896-884.
3. Early Beginnings of the Republic: Hyperinflation; Price Controls: Monetary Unification; the Monetary Standard
Required Reading
Walton and Rockoff, History of the American
Economy: Eighth Edition, Chapter 7.
H. Rockoff. (1984), Drastic Measures:
A History of Wage and Price Controls in the United States, Cambridge University
Press, Chapter 2.
R. Timberlake, Jr. (1978), The Origins
of Central Banking in the United States, Harvard University Press, Chapters
1 and 2.
A. Fraas. (1974), "The Second Bank of
the United States: An Instrument for an Interregional Monetary Union,"
Journal of Economic History, 34, pp. 447-463.
M. Friedman. (1992), Money Mischief,
Harcourt Brace Jovanovich, Chapter 6.
A. Rolnick, B. Smith and W. Weber. "The
Origins of the Monetary Union in the United States." In P. Siklos (ed)
Varieties of Monetary Experience. Kluwer, pages 323-349.
Supplementary Reading
E. J. Perkins. (1994), American Public
Finance and Financial Services 1700-1815. Ohio State University Press.
D. Martin. (1968), "Bimetallism in the
U.S. before 1850," Journal of Political Economy, May.
E. J. Ferguson (161), The Power of the
Purse, Chapel Hill, Chapter 1 to 5.
A. Bezanson. (1948), "Inflation and Controls,
Pennsylvania, 1774-1779,"Journal of Economic History, Vol. VIII, Supplement,
pp. 1-20.
R. Harlow. (1929), "Aspects of Revolutionary
Finance 1775-1786," American Historical Review, 35, 46-68.
P. Studenski and H. Kroos. (1952), A
Financial History of the United States, Chapters 3 to 8.
A. J. Schwartz. (1947), "The Beginning
of Competitive Banking in Philadelphia, 1782-1809," Journal of Political
Economy.
4. The Bank War
Required Reading
Walton and Rockoff, History of the American
Economy: Eighth Edition, Chapter 12.
Peter Temin. (1969), The Jacksonian Economy,
W. W. Norton.
Supplementary Reading
G. Macesich. (1960), "Sources of Monetary
Disturbances in the U.S. 1834-45," Journal of Economic History, September.
R. Timberlake, Jr. (1968), "The Specie
Standard and Central Banking in the U.S. before 1860," Journal of Political
Economy, July.
B. Hammond. (1954), Banks and Politics
in America from the Revolution to the Civil War, Princeton University Press.
5. Free Banking
Required Reading
Walton and Rockoff, History of the American
Economy: Eighth Edition. Chapter 12.
H. Rockoff. (1972), "Money, Prices and
Banks in the Jacksonian Era," in Fogel and Engerman, The Reinterpretation
of American Economic History.
A. Rolnick and W. Weber. (1983), "New
Evidence on the Free Banking Era," American Economic Review, 73, 1080-1091.
H. Rockoff. (1985), "New-Evidence on
Free `Banking in the United States," American Economic Review, 75, 886-889.
Supplementary Reading
H. Rockoff. (1974), The Free Banking
Era: A Re-Examination," Journal of Money, Credit and Banking, 6, 141-168.
A. Rolnick and W. Weber. (1984), "The
Causes of Free Bank Failure: A Detailed Examination," Journal of Monetary
Economics, 14, 267-292.
B. Hammond. (1954), Banks and Politics
in America from the Revolution to the Civil War, Princeton University Press.
6. The Greenbacks: Inflation and Resumption
Required Reading
M. Friedman and A. J. Schwartz, A Monetary
History of the United States, Chapter 2.
M. D. Bordo. (1989), "The contribution
of "A Monetary History of the United States, 1867 to 1960' to Monetary
History." In M.D. Bordo Money, History and Finance Essays in Honor of Anna
J. Schwartz. University of Chicago Press, pp. 49-52.
Supplementary Reading
A. Alchian and R. Kessel. (1962), "Real
Wages in the North During the Civil War: Mitchell's Data Reinterpreted,"
Journal of Political Economy.
E. Lerner. (1956), "Inflation in the
Confederacy, 1861-65," in M. Friedman (ed.) Studies in the Quantity Theory
of Money, Chicago.
L. Officer. (1981), "The Floating Dollar
in the Greenback Period: A Test of Theories of Exchange Rate Determination,"
Journal of Economic History, XLI, 629-650.
J. Kindahl. (1961). Economic Factors
in Specie Resumption: The U.S., 1865-1879," Journal of Political Economy,
59, 30-48.
R. Timberlake. (1975), "The Resumption
Act and the Money Supply," Journal of Monetary Economics, XII, 343-354.
L. Wimmer. (1975), "The Gold Crisis of
1869: Stabilizing or Destabilizing Speculation Under Floating Exchange
Rates," Explorations in Economic History, April.
7. The Gold Standard
Required Reading
M. D. Bordo. (1981), "The Classical Gold
Standard: Some Lessons for Today, "Federal Reserve Bank of St. Louis Review,
63.
D. McCloskey and R. Zecher, "How the
Gold Standard Worked, 1880-1914," in J. Frenkel and H. G. Johnson (eds)
The Monetary Approach to the Balance of Payments, University of Toronto
Press.
Supplementary Reading
M. Friedman and A. J. Schwartz, A Monetary
History of the United States, Chapters 3 and 4.
M. D. Bordo, "The Gold Standard: The
Traditional Approach," in M. D. Bordo and A. J. Schwartz eds. A Retrospective
on the Classical Gold Standard, 1821-1931, University of Chicago.
8. The Agitation Over Silver
Required Reading
M. Friedman and A. J. Schwartz, A Monetary
History of the United States, Chapter 3.
M. Friedman. (1992), Money Mischief,
Chapters 3, 4, and 5.
Supplementary Reading
L. Drake. (1985), "Reconstruction of
a Bimetallic Price Level, "Explorations in Economic History, 22, 194-219.
R. Timberlake, Jr. (1978), "Repeal of
Silver Monetization in the Late Nineteenth Century," Journal of Money,
Credit and Banking, 10, 20-45
P. Garber and V. Grilli. (1986), "The
Belmont Morgan Syndicate as an Optimal Investment Banking Contract,"
European Economic Review, 30, 649-977.
9. The National Banking Era: Financial
Crises
Required Reading
Walton and Rockoff, History of the American
Economy: Eighth Edition, Chapter 19.
P. Cagan. (1963), "The First Fifty Years
of the National Banking System - An Historical Appraisal" in Deane Carson
(ed.) Banking and Monetary Studies, Richard D. Irwin.
A. J. Schwartz. (1986), "Real and Pseudo
Financial Crises" in F. Capie and G. Wood, (eds) Financial Crises and the
World Banking System, London, MacMillan.
E. N. White. (1982), "The Political Economy
of Banking Regulations, 1864-1933," Journal of Economic History, XLII,
33-42.
M. D. Bordo. (1990), "The Lender of Last
Resort: Alternative Views and Historical Experiences, " Federal Reserve
Bank of Richmond, Economic Review, March.
Supplementary Reading
M. D. Bordo, P. Rappoport and A. J. Schwartz,
"Money and Credit During the National Banking Era 1880-1914," in C. Goldin
and H. Rockoff (eds.) Strategic Factors in Nineteenth Century American
Economic History, University of Chicago Press, 1992.
M. Friedman and A. J. Schwartz, A Monetary
History, Chapter 4.
O. M. W. Sprague. (1910), A History of
Crises Under the National Banking System, National Monetary Commission.
E. N. White. (1983), The Regulation and
Reform of the National Banking System, Princeton University Press.
M. D. Bordo (1980), "Financial Crises,
Banking Crises, Stock Market Crashes and the Money Supply: Some International
Evidence 1870-1933," in F. Capie and G. Wood (eds.) Financial Crises and
the World Banking System, London.
10. The Establishment of the Federal
Reserve System
Required Reading
M. Friedman and A. J. Schwartz, A Monetary
History, Chapter 5.
R. C. West. (1976), "Real Bills, The
Gold Standard, and Central Bank Policy," Business History Review, Winter,
pp. 503-513.
Federal Reserve Bank of Cleveland, "Central
Banking in the United States: A Fragile Commitment to Price Stability and
Independence," Annual Report, 1992.
Supplementary Reading
N. Mankiw, J. A. Miron, D. N. Weil. (1987),
"The Adjustment of Expectations to a Change in Regime: A Study of the Founding
of the Federal Reserve," American Economic Review, Vol. 77, No. 3 (June)
pp. 358-374.
11. The 1920's: Was it the High Tide
of Fed Policy?
Required Reading
Walton and Rockoff, History of the American
Economy: Eighth Edition, Chapter 22.
M. Friedman and A. J. Schwartz. (1963),
A Monetary History, Chapter 6.
M. D. Bordo. (1989), "The Contribution
of a Monetary History of the United States 1907-60 to Monetary History,"
pp. 38-42.
Supplementary Reading
K. Brunner and A. Meltzer. (1968), "What
Did We Learn from the Monetary Experience of the united States in
the Great Depression?" Canadian Journal of Economics, Vol. 1, No. 2, pp.
334-348.
12. The Great Depression 1929-33: Monetary
Versus Real Causes
Required Reading
Walton and Rockoff, History of the American
Economy: Eighth Edition, Chapter 23.
M Friedman and A. J. Schwartz (1963),
A Monetary History, Chapter 7.
P. Temin (1976), Did Monetary Forces
Cause the Great Depression, W. W. Norton
Supplementary Reading
A. J. Schwartz. (1981), "Understanding
1929-33" in K. Brunner (ed) The Great Depression Revised, Martinus Nijhoff,
Boston.
R. Gordon and J. Wilcox. (1981), "Monetarist
Interpretations of the Great Depression: An Evaluation and Critique," In
K. Brunner (ed.) The Great Depression Revisited.
J. Hamilton. (1987), "Monetary Factors
in the Great Depression," Journal of Monetary Economics, 19, pp. 145-169.
M. D. Bordo. (1986), "Explorations in
Monetary History," Explorations in Economic History, 23, pp. 352-363.
R. L. Greenfield. (1994), Monetary Policy
and the Depressed Economys: As Illustrated by the Period 1929-1933. Wadsworth.