The efficient macro concept: U.S. monetary, industrial, and foreign exchange policies

The bitter Bank War of the 1830s meant that the United States never developed a central bank in the 1800s.

The pre-Civil War monetary standard was deflationary until the California gold discovery.

Political turmoil erupted later in the century over whether the government should freely coin silver.

Meanwhile, Congress implemented a banking system that drove bank reserves into stock market speculation.

Even when the Federal Reserve was established in 1913, it was decentralised and failed to effectively respond to the Great Depression.

Through this history emerges the story of a money supply increasingly managed by central banking authorities, as well as increasingly nationalised with the end of the gold standard.

Mannen recounts this narrative to show that the next step in historical progress is a program of industrial and foreign exchange policy options focused on driving real growth in the economy.