Presidential Politics and Monetary Policy: Lessons from the 1896 Election
Abstract: The U.S. presidential election of 1896 provides an excellent natural experiment to measure the impact of exchange-rate uncertainty on bank balance sheets and the broader economy. The evidence suggests that the election's contentious free-silver debate significantly constrained banking activity and real economic activity by creating greater uncertainty about U.S. commitment to the gold standard. This finding reinforces the modern-day wisdom of insulating monetary policy from politics.
File(s): File format is text/html https://www.richmondfed.org/publications/research/economic_brief/2020/eb_20-02
Provider: Federal Reserve Bank of Richmond
Part of Series: Richmond Fed Economic Brief
Publication Date: 2020-02