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CONTRACTIONARY DEVALUATION RISK: EVIDENCE FROM THE FREE SILVER MOVEMENT, 1878-1900.
- Source :
- Review of Economics & Statistics; Oct2020, Vol. 102 Issue 4, p705-720, 43p, 11 Charts, 10 Graphs, 1 Map
- Publication Year :
- 2020
-
Abstract
- I identify significant effects of devaluation risk on interest rates and output using US silver coinage policy news between 1878 and 1900 as clean shocks to exchange rate expectations. The Free Silver movement heightened fears the United States would abandon the gold standard and depreciate the dollar. Because Congress, rather than a central bank, set silver coinage policy, silver policy news was likely uncorrelated with economic shocks. Corporate bonds exposed to dollar devaluation returned an additional 1 percent relative to safer bonds when silver risk decreased. Additionally, increased silver coinage risk is associated with an economically significant fall in industrial production. [ABSTRACT FROM AUTHOR]
- Subjects :
- SILVER
INTEREST rate risk
CORPORATE bonds
ECONOMIC shock
FOREIGN exchange rates
Subjects
Details
- Language :
- English
- ISSN :
- 00346535
- Volume :
- 102
- Issue :
- 4
- Database :
- Complementary Index
- Journal :
- Review of Economics & Statistics
- Publication Type :
- Academic Journal
- Accession number :
- 146524063
- Full Text :
- https://doi.org/10.1162/rest_a_00841