Economics 353 Lecture 14-1

Economics 353 Lecture 14-1 - Economics 353 Lecture 14...

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Unformatted text preview: Economics 353 Lecture 14 Northern Agriculture After the Civil War An Age of Deflation It is hard for us to understand today, what it was like to live in an era of deflation. From the end of the Civil War to the end of the 1890s, prices regularly fell. Corn that sold for around $0.70 per bushel in the 1870s sold for $0.35 cents per bushel in the late 1880s. Wheat and cotton prices also decreased. Deflation Deflation was not a bad thing, but it made life different from the way it is today and in some ways much more difficult. Deflation was caused by the political decision to resume the gold standard at the pre-Civil War parity (up to 1879) and then due to policies with respect to the ratio of gold to silver in US currency. Living in a deflationary environment Boss to Employee: Congratulations Jenkins, your salary will be reduced by only 2 percent this year. What happens to mortgage payments? What happens to the timing of the purchase of durable goods? 1865 to 1914 The post-bellum period was a period of great agricultural unrest and unhappiness, which led to a profound change in the relationship between the US government and private economic actors. Growth Improved farm land grew as did the production of the major crops such as wheat, corn, and cotton. Homestead Act 1862...
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This note was uploaded on 09/20/2011 for the course ECO 353 taught by Professor Johnrizzo during the Spring '11 term at SUNY Stony Brook.

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Economics 353 Lecture 14-1 - Economics 353 Lecture 14...

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