Domestic exchange rates and regional economic growth in the United States, 1899-1908: Evidence from cointegration analysis

• 成果类型: Article
• 署名作者: Colorado State University System; Colorado State University Fort Collins
• 刊物名称: JOURNAL OF ECONOMIC HISTORY
• ISSN/ISSBN: 0022-0507
• DOI: 10.1017/S0022050700021707
• 发表日期: 1998
• 页码: 1010-1026
• 关键词: large macroeconomic system; vectors; demand; money

摘要

This article examines one feature of the pre-Federal Reserve financial system that has not been widely researched: the market for bank drafts (the domestic exchanges). Though the exchanges existed for nearly a century, critics argued that exchange rate fluctuations exacerbated financial panics. We find, using cointegration analysis over the period from 1899 to 1908, that differences in growth rates across regions caused predictable movements in rates. We conclude that the exchanges promoted efficiency in the payments system. This supports the view that the private sector might have developed a unified national system had the Fed not abolished the exchanges.