Wednesday 261104
Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 10 Money and Prices in the Long Run Chapter 30 of 36 Money Growth and Inflation Section 24 of 25 … (This article here in book) The Wizard of Oz and the Free silver Debate The movie The Wizard of Oz was based on a children's book written in 1900. It is the story of a young girl, Dorothy, who finds herself lost in a strange land. The story actually is an allegory about late 19th century U.S. monetary policy. From 1880 to 1896, the price level in the U.S. fell by 23%. Because this deflation was unanticipated, it led to a major redistribution of wealth. … Most farmers in the western part of the country were debtors. Their creditors were the eastern bankers. When the price level fell it caused the real value of these debts to rise which enriched the banks and hurt the farmers. Populist politicians held the solution to the farmers' problem was coinage of silver. At the time the U.S. was operating with a g...