Why did countries get off the gold standard?
Posted on December 1, 2008
Filed Under depression |
Gold standard means that the currency that is printed cannot exceed the gold reserves of the country. Since the supply of gold is limited to the amount that can be mined, the government cannot print money on their own discretion. This prevents Central Banks to provide stimulus to the economy in downturns and the economy can get into a downward deflationary spiral. This is what happened during the Great Depression. At that time when the economy started heading downwards; the central bank increa
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Why did countries get off the gold standard?
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