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Working Paper

The Gold Standard As A Rule

In this paper, we show that the monetary rule followed by a number of key countries before 1914 represented a commitment technology preventing the monetary authorities from changing planned future policy. The experiences of these major countries suggest that the gold standard was intended as a contingent rule. By that, we mean that the authorities could temporarily abandon the fixed price of gold during a wartime emergency on the understanding that convertibility at the original price of gold would be restored when the emergency passed.

Suggested Citation

Bordo, Michael D., and Finn Kydland. 1992. “The Gold Standard As A Rule.” Federal Reserve Bank of Cleveland, Working Paper No. 92-05.