10-23-08_Lecture_Notes - Economics 323 (10/23/08) Today:...

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Economics 323 (10/23/08) Today: Perkins (9-10), North (2-5), Adams Tuesday: No new reading Thursday: Walton (140-47),Gates (3-4) EXAM ON THURSDAY NOVEMBER 6, 2008 (Not Cumulative) War: Men and materials mobilize: divert from civic use Stocks Tax Production Borrow Buy …. Impress Import Print Seize Gun powder: charcoal, comes from trees, sulfur, but potassium nitrate caused a problem as colonists didn’t have too much and didn’t know how to produce it so they just imported gun powder Vast uses purchased by government from civilians Purchased financed by taxing, borrowing, and printing IMPRESSMENT- government would just take something that they needed and civilian would only get a receipt Currency finance- through 1779, governments print more money to make purchases First issue of congressional money called continentals - 200,000,000 from 75-79 Earlier issues were withdrawn and replaced with new issues Value of money begins to decline- inflation Hyperinflation by the end of the period (79) In 1779, 124 MM dollars issued but was only worth about 6 MM in silver In Jan 1781, trading over 100/1 so 100 dollars to 1 piece of silver- in the summer paper became worthless Inflation tax- this printed money is demanding real resources- those who hold the paper (value is going down) is paying an implicit inflation tax (tax by holding the paper over the period) Tax that is shared very widely (franklins justification) When money did work, move to requisition (before 1779 requisition meant to send to the state a revenue quota- system of taxation during the revolutionary period) through this method because congress has no right to tax people only states can After the collapse of continentals, requisition means requiring the actually supplies and
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This note was uploaded on 02/01/2009 for the course ECON 3230 taught by Professor Tomlyons during the Fall '08 term at Cornell University (Engineering School).

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10-23-08_Lecture_Notes - Economics 323 (10/23/08) Today:...

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