1995
DOI: 10.2307/2077791
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Gresham's Law in Nineteenth-Century America

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Cited by 19 publications
(11 citation statements)
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“…However, as more gold discoveries in the late 1840s and early 1850s increased the market value of silver dollars from its intrinsic content, gold became dominant circulating medium. The predictions of this paper are consistent with the observations in Greenfield and Rockoff (1995): if government exchange rate policy does not result in too big a difference in the mint ratio and market ratio, both coins circulate. As the policy makes a money too valuable to be used as a medium of exchange (such as silver dollar of the late 1840s in the example), it will be hoarded from circulation.…”
Section: Discussionsupporting
confidence: 89%
See 1 more Smart Citation
“…However, as more gold discoveries in the late 1840s and early 1850s increased the market value of silver dollars from its intrinsic content, gold became dominant circulating medium. The predictions of this paper are consistent with the observations in Greenfield and Rockoff (1995): if government exchange rate policy does not result in too big a difference in the mint ratio and market ratio, both coins circulate. As the policy makes a money too valuable to be used as a medium of exchange (such as silver dollar of the late 1840s in the example), it will be hoarded from circulation.…”
Section: Discussionsupporting
confidence: 89%
“…One can use such model to discuss how recoinage policy affects the frequency of trade, the price level, and the role of government in providing sufficient intermediation to facilitate trade. Greenfield and Rockoff (1995) describe a historical example in which government's manipulation of the official exchange rate (the mint ratio) affected the market ratio and circulation of coins. In the early 19th century of U.S., gold was undervalued at the mint given the prevailing market prices (so it was good money).…”
Section: Discussionmentioning
confidence: 99%
“…We thank Arthur Fishman, Angela Redish, Thomas Sargent, Theodosios Temzelides, and seminar participants at the Federal Reserve Banks of Minneapolis and Philadelphia, the Penn Macro Lunch Group, the Universities of Chicago, Essex, Cambridge and Haifa, and the 1996 SEDC conference in Mexico City.1 Moreover, its empirical validity is questionable, or at least seems to depend on circumstances. Laughlin (1903,, describes a variety of instances in which Gresham's Law appears to work, while Rolnick and Weber (1986) describe several examples that seem to violate it, although Greenfield and Rockoff (1995) dispute these examples. De Roover (1949, 93) discusses the misattribution of the Law to the 16th century English banker Thomas Gresham, and remarks: "Gresham, consequently, does not state that bad money necessarily drives out good.…”
mentioning
confidence: 99%
“…Weber of the Federal Reserve bank of Minneapolis, neither of the versions, the popular and the qualified, is adequate to answer the question about silver dollars. The short popular version is contradicted by several historical facts, where the authors find that bad money failed to drive out good money (however in [32], Greenfield and Rockoff dispute these examples). Moreover, in [31], it is told that the qualified version of the law, as given in Ref.…”
Section: Controversies On the Gresham's Lawmentioning
confidence: 99%