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Monetary Policy And The Dollar

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Executive Summary

In this paper the author proposes 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 monetary systems of colonial America and under the Articles of Confederation. This is because the dollar and all that came with it monetized the modern sector of the U.S. economy and tied the supply of money more closely to the capital market and the provision of credit - feats that were not possible in an era when colonial legislatures were unable to credibly commit to controlling paper money emissions.

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