Inflation and the wage lag during the American Civil War

Stephen J. DeCanio*, Joel Mokyr

*Corresponding author for this work

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12 Scopus citations

Abstract

This paper examines the role of inflation in financing the American Civil War, and the effects of that inflation on the level of real wages in the North. A wage determination model is specified in which the equilibrium real wage is determined by real forces and the money wage is allowed to adjust to its equilibrium value with lags. Econometric estimates of the model support Wesley Clair Mitchell's contention that wage movements lagged price movements during the war. Comparison of the estimated equilibrium money wage and the estimated current money wage makes it possible to assess the magnitude and importance of the wartime redistribution of income attributable to inflation.

Original languageEnglish (US)
Pages (from-to)311-336
Number of pages26
JournalExplorations in Economic History
Volume14
Issue number4
DOIs
StatePublished - Nov 1977

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ASJC Scopus subject areas

  • History
  • Economics and Econometrics

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