Inflation and the wage lag during the American Civil War

Stephen J. DeCanio; Joel Mokyr

doi:10.1016/0014-4983(77)90019-5

Inflation and the wage lag during the American Civil War

Stephen J. DeCanio^*, Joel Mokyr

^*Corresponding author for this work

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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 language	English
Pages (from-to)	311-336
Number of pages	26
Journal	Explorations in Economic History
Volume	14
Issue number	4
DOIs	https://doi.org/10.1016/0014-4983(77)90019-5
State	Published - Nov 1977
Externally published	Yes

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Inflation and the wage lag during the American Civil War

Abstract

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