Working Paper: NBER ID: w31886
Authors: Howard Bodenhorn
Abstract: How far did antebellum bank notes travel? Up to now, we did not know. Using previously overlooked data on interbank holdings of bank notes and the records of a small-time note broker, I find that most bank notes circulated within about 50 miles of the issuing banks. Few notes were observed from as far as 200 miles away. Several studies of secondary markets for privately issued currencies assume that notes moved across vast geographic space, but these new findings suggest that we may need new models of bank note pricing and the efficiency of relatively unfettered markets in private currencies.
Keywords: No keywords provided
JEL Codes: N21
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Distance bank notes traveled (E41) | Effectiveness as a medium of exchange (E42) |
| Distance bank notes traveled (E41) | Likelihood of encountering a bank note (E42) |
| Distance of circulation (R12) | Average discount of a note (E43) |
| Distance of circulation (R12) | Median discount of a note (D30) |
| Limited geographic scope of bank notes (E42) | Effectiveness in facilitating long-distance transactions (F69) |