AMER.MONEY: Political Monetary Cycles and the Independent Treasury

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                ABSTRACTS IN ECONOMIC HISTORY
                     (c) 2001 EH.Net
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Name: Jac C. Heckelman
Email: Jac_C_Heckelman@mta.wfu.edu
Institution: Wake Forest University

Co-author: John H. Wood
Wake Forest University
PO Box 7505
Winston Salem NC 27109

Title: Political Monetary Cycles and the Independent Treasury

Internet Address of abstracted work: not available

By mail:
Wake Forest University
Department of Economics
PO Box 7505
Winston Salem NC 27109

Language: English

Abstract:
The theory of political business cycles predicts incumbent
politicians will alter their economic policies to spur short-run
growth to attract additional votes for the upcoming election. There
has not been much emphasis on the possibility of historical political
business cycles prior to the Keynesian Revolution. In fact, no study
has yet undertaken a systematic approach to testing for policy cycles
during this period. Our study will bridge this gap by considering
cycles in monetary policy for the periods of 1875-1914 until the
start of Fed operations, and 1914-1933 until abandonment of the gold
standard. To properly test for political cycles, it is necessary to
develop reaction functions for the Treasury and compare against the
reaction function later held by the Fed. This will also reveal if
creation of an independent monetary authority to be insulated from
political pressures changed the manner in which policy was directed,
aside from political issues.

Bibliography: Heckelman, Jac C. and John H. Wood, "Political Monetary
Cycles and the Independent Treasury," Manuscript, Wake Forest
University, 2001.

Subject: H, V
Geographical Area: 7
Country/Region: United States
Time Period: 7, 8

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