The world has had two experiences with gold standards: the classical gold standard and the interwar gold standard. The ‘rules of the game’, government policies to preserve the gold standard, were rarely followed. Rather, government responsible policy and credible commitment to the standard, private stabilizing arbitrage and speculation, and stable political and economic environment made the classical gold standard a success. The absence of these elements and the presence of the Great Depression combined to make the interwar gold standard a failure.
KeywordsArbitrage Bank of France Bank rate Bank Restriction Period Banking crises Bimetallism Bullion Bullion standard Central banking Commitment Convertibility Current account deficits Deflation Exchange controls Federal Reserve System Fixed exchange rates Floating exchange rates Gold standard Gold-exchange standard Great Depression Monetary base Money multiplier Money supply Orthodox metallism Reichsbank Reserve ratio Silver standard Specie-flow mechanism Speculation Sterilization Sticky prices Sticky wages
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