Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/94594
Authors: 
Burdekin, Richard C.K.
Weidenmier, Marc D.
Year of Publication: 
2000
Series/Report no.: 
Claremont Colleges Working Papers in Economics 2000-29
Abstract: 
Confederate Treasury notes were convertible into government bonds at par. This provided an imbedded option value for the currency. Confederate interest-rate policy encouraged, and ultimately coerced, holders of Treasury notes to exchange these notes for bonds by imposing deadlines on their convertibility. In this paper we identify a long-run equilibrium relationship between the gold value of the bonds and the gold value of Confederate currency. We also show that the three funding acts aimed at precipitating the conversion of currency into bonds were effective in temporarily dampening inflationary pressures.
Subjects: 
Confederacy
bonds
interest-rate pegging
JEL: 
N20
N40
Document Type: 
Working Paper

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