Friday, April 29, 2022

The Gold Standard?

 It is not hard to find people who think the gold standard is the solution to our economic problems. Here economist K. Kıvanç Karaman looks at the gold standard over several centuries. 

"These patterns make clear that being on gold/silver standard was not a hard commitment to keep the value of money stable. First, because states could and did depreciate on gold/silver standard. Second, because they could get off gold/silver standard altogether and switch to fiat"

"To sum up, monetary standards could not and cannot be used to short-circuit politics and put monetary policy on auto-pilot. Ultimately, politics shapes whether gold standard, fiat standard, or any other standard is adopted, and how it is run."

You can find the abstract here.

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