The Reconstructed International Monetary System and the Process of Its Collapse—Rueff, the Unwavering Theorist

Yasuo Gonjo, Kazuhiko Yago and Patrick Fridenson
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Yasuo Gonjo: Yokohama National University
Kazuhiko Yago: Waseda University
Patrick Fridenson: Ecole des Hautes Etudes en Sciences Sociales

Chapter Chapter 5 in The Truth of Liberal Economy, 2023, pp 29-38 from Springer

Abstract: Abstract The international monetary system was marked by the adoption of the gold exchange standard in 1922. This was followed by the confrontation between Britain and France regarding the return to the gold standard, the arrival of the Great Depression, and the formation of the Popular Front government in 1936. During this period, Rueff was appointed Treasurer in London, Deputy Director General for International Finance at the Ministry of Finance, and Director General of the Treasury Department. Rueff opposed the gold exchange standard from the side of “monetary orthodoxy,” while Keynes argued for a “modified gold standard,” which would remove the restriction of gold from the issuance of currency. As for the Great Depression, Rueff argued that the credit creation function brought about by the gold exchange standard in the United Kingdom and the United States created excessive liquidity. The gold exchange standard was, according to Rueff, a “terrible inflationary device” and “the gold exchange standard was the cause of the Great Depression.”

Date: 2023
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DOI: 10.1007/978-981-99-0841-7_5

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