The Secret of the Gold Standard’s Durability and Success

M. Panić
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M. Panić: Selwyn College

Chapter 3 in European Monetary Union, 1992, pp 81-117 from Palgrave Macmillan

Abstract: Abstract The analysis in the previous chapter was deliberately confined to the current account and short-term capital flows in accordance with traditional, static models of the adjustment and financing processes under fixed exchange rate systems in general and the classical gold standard in particular. It showed conclusively that the standard never operated in the way described by the classical/neoclassical models. The synchronisation of short-term movements in national prices and interest rates was such that the ‘mechanisms’ analysed in the last chapter could not have produced either lasting adjustments or long-term financing of the kind attributed to them by the conventional wisdom. It is necessary, therefore, to look for other explanations why this, the most exacting of all quasi international monetary unions, managed to survive for so long.

Keywords: Foreign Investment; Current Account; International Migration; European Monetary Union; Current Account Deficit (search for similar items in EconPapers)
Date: 1992
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-13452-6_4

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DOI: 10.1007/978-1-349-13452-6_4

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