Indebted: The Entanglement of the Political and Financial Elite and the Origins of the Gilded Age

Abstract Why did the United States return to the gold standard in 1879, and why did the ensuing Gilded Age feature a high level of financial instability? While existing scholarship adopts an economic development model of monetary policy that emphasizes material interests in explaining government retrenchment during Reconstruction, this paper argues that the confluence of state interests in cheap borrowing and financial elites' interest in debt monetization led to the outsourcing of monetary policy and the financial instability of the Gilded Age.