Fetters of Gold and Paper

Barry Eichengreen and Peter Temin ()

No 16202, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We describe in this essay why the gold standard and the euro are extreme forms of fixed exchange rates, and how these policies had their most potent effects in the worst peaceful economic periods in modern times. While we are lucky to have avoided another catastrophe like the Great Depression in 2008-9, mainly by virtue of policy makers' aggressive use of monetary and fiscal stimuli, the world economy still is experiencing many difficulties. As in the Great Depression, this second round of problems stems from the prevalence of fixed exchange rates. Fixed exchange rates facilitate business and communication in good times but intensify problems when times are bad.

JEL-codes: F33 N20 (search for similar items in EconPapers)
Date: 2010-07
Note: DAE IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

Published as Barry Eichengreen & Peter Temin, 2010. "Fetters of gold and paper," Oxford Review of Economic Policy, Oxford University Press, vol. 26(3), pages 370-384, Autumn.

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