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Working Paper

The Gold Standard As A Rule

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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.
02.01.1992ISSN 2573-7953 WP 92-05DOI 10.26509/frbc-wp-199205

Working Papers of the Federal Reserve Bank of Cleveland are preliminary materials circulated to stimulate discussion and critical comment on research in progress. They may not have been subject to the formal editorial review accorded official Federal Reserve Bank of Cleveland publications. The views expressed in this paper are those of the authors and do not represent the views of the Federal Reserve Bank of Cleveland or the Federal Reserve System.

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. https://doi.org/10.26509/frbc-wp-199205