Thursday, September 9, 2010

The Gold Standard and the Great Depression

A useful reminder of how the gold standard contributed to the Great Depression by James Hamilton (Econbrowser) here .

The 13 countries that abandoned first their gold parity (1931) performed best, with average growth rate of industrial production turning positive in every year from 1932 on.

A lesson for countries that stick with fixed exchange rate regimes, or common currency areas, or quasi-fixed regimes, in the current Great Recession?

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