War Debt, Moral Hazard, and the Financing of the Confederacy

Grossman, Herschel I.; Han, Taejoon

doi:10.2307/2078023

Cited by 12 publications

(7 citation statements)

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“…The relation between the Confederate money supply and mflauon has been explored by Lerner (1955Lerner ( , 1956, Godfrey (1978), and Burdekin and Weidenmier (2001). The role of fiscal policy and currency reforn1s has been examined by Lerner (1954), Pecquet (1987, Burdekin and Langdana (1993), Grossman and Han (1996), and Burdekin and Weidenmier (2003). TI1e behavior of financial markets during the conflict has been studied by Roll (1972), Calomiris (1988), Davis and Pecquet (1990), Weidenmier (2000), and Brown and Burdekin (2000).…”

Section: The Establishment Of Confederate Currency As a Medium Of Exchangementioning

confidence: 99%

The Emancipation Proclamation, Confederate Expectations, and the Price of Southern Bank Notes

Pecquet

Davis²,

Kanago³

2004

Southern Economic Journal

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We examine the behavior of a semimonthly series of the Confederate dollar price of bank notes. These notes traded at par with Confederate dollars from October of 1861 until November 5, 1862. We use a model of the demand for two currencies to argue that this departure from par results from altered Southern expectations after the 1862 Congressional elections assured the enactment of the Emancipation Proclamation. Previously, Southerners believed a win or a negotiated settlement would allow a return to the Union intact. When these expectations changed, bank notes appreciated against Confederate dollars. In addition, our empirical work shows that notes appreciated following Northern victories.

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Section: The Establishment Of Confederate Currency As a Medium Of Exchangementioning

confidence: 99%

The Emancipation Proclamation, Confederate Expectations, and the Price of Southern Bank Notes

Pecquet

Davis²,

Kanago³

2004

Southern Economic Journal

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“…According to Hirshleifer (1995), it is necessary to specify a technology of conflict in order to determine the probability of defeat. In Grossman and Han (1996), p depends on a function of war spending,…”

Section: Determining the Probability Of Avoiding Defeatmentioning

confidence: 99%

“…According toGrossman and Han (1996), the agent is an international creditor. Whatever the nationality of the agent, he maximizes his utility over time and is interested in the expected value of public debt before subscribing.…”

mentioning

confidence: 99%

“…Budget and monetary policies are independently determined, so that prices adjust.3 At least this is true in a small interval of time. 4 This is an important issue asGrossman and Han (1996) argue that, for the conditionality to be feasible, the commitment to spend an amount g of war spending must be verifiable.5 Grossman has explored such possibilities in different models of insurrection. 6 This could be a large range of investment decisions.…”

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confidence: 99%

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Pricing war within a real option framework∗

Medina

Nidier

2003

Defence and Peace Economics

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The aim of this paper is to provide insights on war spending using simple tools of financial calculus rather than developing a general theory. Combining Grossman and Han's theory of war finance with the empirical literature that displays a straightforward relationship between the real value of money and wartime military events, we advocate the use of the real option approach of war spending. Some calculations and an empirical example illustrate this approach.

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“…These cotton bonds represented the Confederacy's sole formal external loan. Grossman and Han (1996) argue that the Confederacy would have undertaken more foreign loans had she had fewer mobilizable resources. As it was, however, military reverses in the summer of 1863 made it infeasible for the Confederacy to pursue any further Erlangertype loans --as acknowledged by the Confederacy's own fiscal agent in Paris, Colin…”

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confidence: 99%

Turning Points in the U.S. Civil War: A British Perspective

Brown¹,

Burdekin²

2000

J. Eco. History

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. AbstractThis paper examines the Confederate cotton bonds floated in

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War Debt, Moral Hazard, and the Financing of the Confederacy

Cited by 12 publications

References 0 publications

The Emancipation Proclamation, Confederate Expectations, and the Price of Southern Bank Notes

The Emancipation Proclamation, Confederate Expectations, and the Price of Southern Bank Notes

Pricing war within a real option framework∗

Turning Points in the U.S. Civil War: A British Perspective

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