In this essay I propose that the adoption of the U.S. dollar as a common currency shortly after the ratification of the Federal Constitution and the accompanying transition from a fiat to specie standard was a pivotal moment in the nation's early history and marked an improvement over the...

Studies of early U.S. growth traditionally have emphasized real-sector explanations for an acceleration that by many accounts became detectable between 1815 and 1840. Interestingly, the establishment of the nation's basic financial structure predated by three decades the canals, railroads, and...

This essay, written in honor of the economic historian Robert Higgs, surveys the economic history of African Americans from the end of slavery to the present day. This history, I argue, was largely one of convergence. However, convergence was not continuous but, rather, was punctuated by...

A model of firm-level optimal pricing under stochastic inflation and fixed costs of adjusting prices is solved and characterized. In this model, inflation alternates stochastically between some positive rate g and zero inflation. We find that a single (s,S) band is not optimal for the firm, as...

What are the "liquidity services" provided by �over-priced� assets? How do international seigniorage payments affect the choice of monetary policies? Does a country gain when other hold its �over-priced� assets? These questions are analyzed here in a model in which demand...

The paper assumes a government advantage in collecting income contingent payments and develop a proposal for a government loan program that is an integral part of the tax system. The focus is on administrative costs and the difference between the collection technologies available to the public...

U.S. Treasury securities are nominal assets that are subject to two sources of risk: inflation risk, and bond-supply risk. Inflation risk is well-known, but supply risk has received little attention. For reasons we shall discuss in the body of the paper, the amount of securities offered to the...

Why do people hold dollar denominated assets when higher rate of return alternatives are available? Can a country collect seigniorage payments from other countries in the long run? Does the supplier of the international currency benefit from doing so? I provide qualitative answers to these...

Data from Okinawa's monetary union with the United States in 1958 and with Japan in 1972 are used to obtain a quantitative indication of how monetary union might affect the behavior of nominal and real shocks across two economies. With monetary union, the variance of the real exchange rate...

The welfare gains from adopting a zero nominal interest policy depend on the implementation details. Here I focus on a government loan program that crowds out lending and borrowing and other money substitutes. Since money can be costlessly created the resources spent on creating money...