The posting of Trevor Dick’s and John Floyd’s article entitled "Capital Imports and the Jacksonian Economy: A New View of the Balance of Payments" on November 10, 1997 spawned an impromptu discussion of the contributions authors have made to the understanding of the "Jacksonian boom."

This article uses a portfolio theory of adjustment rather than a price-specie-flow theory to explain the United States’ 1840-1860 balance of payment adjustments. Further, it is the authors' contention that it was not the flow of gold and silver in and out of the United States that caused relative prices to rise. Rather, the excess demand for money in the U.S. and movements in economic activities led to relative price level changes. This article departs from previous accounts of why the U.S. entered an inflationary period in the 1830s. Past analyses have attacked the Bank of England’s credit expansion in the 1830s, the role of capital mobility and the price-specie-flow mechanism.

Many questioned the contribution of these authors to the understanding of the Jacksonian economy. Sam Williamson asks whether "the villain—the agent most responsible for the Panic of 1837—[was] the British government," (November 12, 1997) and if so what additional story can we learn from Dick’s and Floyd’s article, (November 14, 1997). Trevor Dick responded to Williamson and to Peter Temin’s inquiry into the Jacksonian boom by indicating that "any monetary cause must have been a worldwide one," (November 21, 1997). In essence, this article’s contribution to the study of and historical interpretation of the 1830s inflationary period is that "shifts of gold between countries are a response to real expansions and demand for money changes that differ across countries—gold flows between countries do not cause booms," (John Floyd, November 17, 1997). Such a statement, as indicated by Deirdre McCloskey, illustrates a belief that the price-specie-flow mechanism is dead, (November 24, 1997).

Perhaps this is the only story that can be extracted from Dick’s and Floyd’s article. As Dick indicated on November 29, 1997:

"Any story one tells cannot use the old price-specie-flow mechanism as a feature of the analysis and must recognize that the Jacksonian boom was either a world wide phenomenon not caused by any country, or a boom in the U.S. caused by expanding domestic investment opportunities and not by an inflow of gold. Beyond this we don’t attempt an explanations-we don’t try to tell the story of the boom."

This impromptu discussion analyses the contributions of Dick’s and Floyd’s article "Capital Imports and the Jacksonian Economy: A New View of the Balance of Payments" to the empirical and historical understanding of the United States in the 1830s.

The following is a list on the relevant Forum responses that are not currently listed, but are located in the archives.