Real Effects of Supplying Safe Private Money / Chenzi Xu, He Yang.

Format:

Book

Author/Creator:

Xu, Chenzi.

Contributor:

National Bureau of Economic Research.

Yang, He.

Series:

Working Paper Series (National Bureau of Economic Research) no. w30060.

NBER working paper series no. w30060

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2022.

Summary:

Privately issued money often bears devaluation risk that create monetary transaction frictions. We evaluate the real effects of supplying a new type of safe money in the historical context of the US in 1863. We instrument for the change in monetary frictions locally using regulatory capital requirements and measure the degree safe money access with a market access approach derived from general equilibrium trade theory. Lowering monetary transaction costs increased traded goods production and spurred structural transformation with more manufacturing output, employment, and urban population. The growth in manufacturing was driven by employment and inputs rather than capital investment.

Notes:

Print version record

May 2022.