The Stability of the Gold Standard and the Evolution of the International Monetary System
September 1, 1995
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Summary
This paper examines some popular explanations for the smooth operation of the pre-1914 gold standard. We find that the rapid adjustment of economies to underlying disturbances played an important role in stabilizing output and employment under the gold standard system, but no evidence that this success also reflected relatively small underlying disturbances. Finally, the paper also suggests an explanation for the evolution of the international monetary system based on growing nominal inertia over time.
Subject: Commodities, Economic theory, Exchange rate arrangements, Exchange rates, Foreign exchange, Gold, International monetary system, Money, Supply shocks
Keywords: aggregate demand, aggregate demand demand schedule, aggregate supply, aggregate supply supply curve, aggregate supply supply schedule, aggregate-supply-aggregate-demand framework, Europe, Exchange rate arrangements, Exchange rates, framework of the paper, Gold, gold standard, gold standard country, gold standard system, gold standard year, International monetary system, price, short-run aggregate supply supply curve, Supply shocks, WP
Pages:
32
Volume:
1995
DOI:
Issue:
089
Series:
Working Paper No. 1995/089
Stock No:
WPIEA0891995
ISBN:
9781451851243
ISSN:
1018-5941
