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Presidential Politics and Monetary Policy : Lessons From the 1896 Election, No. 20-02

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Presidential Politics and Monetary Policy : Lessons From the 1896 Election, No. 20-02

DATE: February 2020

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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.

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Fulford, Scott Lansing, 1979- , Rhodes, Karl , Schwartzman, Felipe Farah, 1981- and Federal Reserve Bank of Richmond. "Presidential Politics and Monetary Policy : Lessons From the 1896 Election, No. 20-02," Economic Brief (February 2020). https://fraser.stlouisfed.org/title/6034/item/586562, accessed on June 3, 2023.

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