Real Effects of Supplying Safe Private Money

作者：Chenzi Xu, He Yang · 发表于：National Bureau of Economic Research · 年份：2022 · DOI：10.3386/w30060 · 被引用次数：5 · 研究领域：Economic theories and models、Banking stability, regulation, efficiency、European Monetary and Fiscal Policies

Privately issued money often bears devaluation risk that create monetary transaction frictions. We evaluate the real effects of supplying a new type of safe money in the historical context of the US in 1863. We instrument for the change in monetary frictions locally using regulatory capital requirements and measure the degree safe money access with a market access approach derived from general equilibrium trade theory. Lowering monetary transaction costs increased traded goods production and spurred structural transformation with more manufacturing output, employment, and urban population. The growth in manufacturing was driven by employment and inputs rather than capital investment.