GOLD STANDARD SYSTEM

As a current debate topic, few notes from ‘Between Recession and Depression’ are as below;

The main advantages are:

• Limiting the governments’ power in creating inflation through issuing excess paper currency,
• Creating certainty in international trade through fixed pattern of exchange rates

The main disadvantage is:

• Being a barrier in the flexibility of the supply of money as the supply of gold is not close the growing needs of world economy’s supply needs.