Reversing Financial Reversals: Government and the Financial System since 1789

Richard Sylla

in Government & The American Economy

Published by University of Chicago Press

Published in print May 2007 | ISBN: 9780226251271
Published online February 2013 | e-ISBN: 9780226251295 | DOI:
Reversing Financial Reversals: Government and the Financial System since 1789

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Most informed observers today would agree that the United States has just about the best financial system in the world. Its problems are newsworthy mostly because they arise in a context of a well-functioning financial order, not one that is disorderly. The federal government easily collects tax revenues to cover most of its expenditures, and it manages a huge national debt of $8 trillion. The U.S. dollar remains the world's preeminent currency. The U.S. banking system is dynamic and efficient. The country has the world's largest and arguably most innovative securities markets. Its corporations are world leaders in many industries. This chapter traces the development of the U.S. financial system over the course of two centuries in terms of the political economy of its interactions with government. It first looks at the financial reversals of 1801–1832 and 1832–1863 before turning to the U.S. Federal Reserve.

Keywords: United States; financial system; financial reversals; U.S. Federal Reserve; currency; banking; securities markets; political economy; government

Chapter.  14588 words. 

Subjects: Economic History

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