Destabilizing the Global Monetary System: Germany's Adoption of the Gold Standard in the Early 1870s

2019 ◽  
Author(s):  
Johannes Wiegand
Keyword(s):  
Gold Standard ◽  
Monetary System ◽  
Global Monetary System

scholarly journals A Model of the International Monetary System*

2017 ◽  
Vol 133 (1) ◽  
pp. 295-355 ◽  
Author(s):  
Emmanuel Farhi ◽  
Matteo Maggiori
Keyword(s):  
Simple Model ◽  
Gold Standard ◽  
Supply And Demand ◽  
International Monetary System ◽  
Rate System ◽  
Monetary System ◽  
The World ◽  
The Common ◽  
Triffin Dilemma ◽  
World Supply

AbstractWe propose a simple model of the international monetary system. We study the world supply and demand for reserve assets denominated in different currencies under a variety of scenarios: a hegemon versus a multipolar world; abundant versus scarce reserve assets; and a gold exchange standard versus a floating rate system. We rationalize the Triffin dilemma, which posits the fundamental instability of the system, as well as the common prediction regarding the natural and beneficial emergence of a multipolar world, the Nurkse warning that a multipolar world is more unstable than a hegemon world, and the Keynesian argument that a scarcity of reserve assets under a gold standard or at the zero lower bound is recessionary. Our analysis is both positive and normative.

Money metrology

2020 ◽  
pp. 42-50
Author(s):  
V. N. Krutikov ◽  
V. V. Okrepilov
Keyword(s):  
Gold Standard ◽  
Supply And Demand ◽  
Precious Metals ◽  
Legal Metrology ◽  
Important Principle ◽  
Monetary System ◽  
Stage Of Development ◽  
Fixed Weight ◽  
Long Time ◽  
Material Measure

The influence of the provisions of legal metrology on the formation and functioning of the monetary environment in market conditions is studied. It is shown that the use of material (reference) measures for determining the value of goods in monetary units makes it possible to form a stable monetary system, equal for all market participants. This system can reasonably be attributed to information measuring systems. Systems based on the use of constant material measures that determine the value of goods and money in international trade have been formed and functioned for a long time. In the XIX-XX centuries, the monetary system, in which a fixed weight of gold served as the material measure of money, was called the “gold standard”. In the 1970s, this system was abandoned without objective reasons. Nowadays, many people believe that the main reason is the uncontrolled issuance of paper money (US dollars). As a result, the material measure of money was replaced by a monetary measure. The money of a number of selected countries turned out to be a measure of the national currencies of other countries. Then money was made a commodity – an object of market trading, the price of which is determined by supply and demand. Thus, the most important principle of metrology was violated – the invariability (constancy) of the measure of system objects. The resulting monetary system became unstable. This situation has led to an increase in the number of proposals for a return to the gold standard. The analysis carried out in the paper confirmed the relevance of these proposals. At the present stage of development of metrology, it is advisable to explore the possibility of a broader (not only at the expense of precious metals) resource provision of material monetary measures, in particular, to consider the possibility of using materials and (or) goods that are in high demand in the international market as monetary measures.

The Fall

Money ◽  
2017 ◽  
Author(s):  
John Kenneth Galbraith ◽  
James K. Galbraith
Keyword(s):  
United States ◽  
New York ◽  
World War I ◽  
Gold Standard ◽  
Stock Exchange ◽  
The United States ◽  
World War ◽  
Industrial Countries ◽  
Monetary System ◽  
York Stock Exchange

This chapter examines the end of the international gold standard during World War I. The creation of the Federal Reserve System—with its idea of centralized banking carried out by twelve central banks—ended the United States's long struggle to perfect a sensible, conservative monetary system. Everywhere in the industrial countries money of whatever kind was now exchangeable, without pretense or delay, into gold. The chapter considers how the major industrial participants—Germany, France, Britain, Austria—suspended specie payments and went off the gold standard when World War I broke out; the dumping of securities on the New York market in the first nervous days of the war; the shutdown of the New York Stock Exchange; and how the United States eventually abandoned the gold standard. The increase in whole prices in the United States during all the war years is also discussed.

Concluding Thoughts

2018 ◽  
Author(s):  
Atish R. Ghosh ◽  
Jonathan D. Ostry ◽  
Mahvash S. Qureshi
Keyword(s):  
Emerging Markets ◽  
International Monetary System ◽  
Policy Makers ◽  
Monetary System ◽  
Trade Offs ◽  
Liquidity Insurance ◽  
Benefit Cost ◽  
Global Monetary System ◽  
Opening Up

This concluding chapter argues that the policy makers' vade mecum laid out in the previous chapter raises broader issues for the global monetary system. Notwithstanding the fact that some of the emerging markets may have liberalized their capital accounts prematurely, it questions whether emerging markets have further to gain from opening up, or indeed whether they would not be better off retaining restrictions on at least the riskiest forms of foreign liabilities and transactions. This is particularly pertinent since most of these countries do not enjoy the liquidity insurance provided by swap facilities let alone the reserve currency status. They are forced to self-insure through reserve accumulation, which is costly both to the country and to the international monetary system. Alternative forms of insurance could arguably yield favorable benefit–cost trade-offs, particularly if they result in a safer mix of flows that makes economies less prone to risks from changes in global push factors.

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