Monetary policy and regional interest rates in the United States, 1880-2002
By: John Landon-Lane, Hugh Rockoff.
Contributors: Rockoff, Hugh.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10924; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10924.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Monetary policy -- United States -- History.; Monetary unions -- History.; Interest rates -- United States -- History.
Description: "The long running debate among economic historians over how long it took regional financial markets in the United States to become fully integrated should be of considerable interest to students of monetary unions.  This paper reviews the debate, discusses the implications of various hypotheses for the optimality of the US monetary union, and presents some new findings on the origin and diffusion of monetary shocks.  It appears that financial markets were integrated in the late nineteenth and early twentieth centuries in the sense that monetary shocks were routinely transmitted from one part of the United States to another.  In particular, shocks to interest rates in the Eastern financial centers were routinely transmitted to the periphery.  However, it also appears that during this period significant shocks to bank lending rates in the periphery often arose on the periphery itself.  This suggests that a nineteenth century monetary authority that relied on operations confined to eastern financial centers would have had a difficult time managing the U.S.  monetary union.  After World War II the problem of eruptions on the periphery declined"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
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