The Continental Dollar: Initial Design, Ideal Performance, and the Credibility of Congressional Commitment / Farley Grubb.

Format:

Book

Author/Creator:

Grubb, Farley.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w17276.

NBER working paper series no. w17276

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

The Continental Dollar

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2011.

Summary:

An alternative history of the Continental dollar is constructed from original sources and tested against evidence on prices and exchange rates. The Continental dollar was a zero-interest bearer bond, not a pure fiat currency. The public was promised redemption at face value in specie at fixed future dates. When time-discounting (rational bond pricing) is separated from depreciation, little depreciation occurred before 1779. In 1779, and again in 1780, Congress passed ex post facto laws altering Continental-dollar maturity dates. Because these new dates were not fiscally feasible, Congress' commitment to the Continental dollar lost credibility. Depreciation and collapse followed shortly thereafter.

Notes:

Print version record

August 2011.