Abstract

http://ssrn.com/abstract=2406966
 


 



The Merits and Feasibility of Returning to a Commodity Standard


Lawrence H. White


George Mason University - Department of Economics

March 10, 2014

GMU Working Paper in Economics No. 14-05

Abstract:     
Although few academic economists today endorse a gold standard, historical data show that actual gold standards have outperformed actual fiat standards in at least five respects: (1) lower mean inflation rate, hence lower deadweight cost of economizing on money balances; (2) lower price level uncertainty, hence deeper long-term bond markets; (3) greater international trade and capital flows, due to network benefits of a common currency area; (4) lower resource costs of gold mining for monetary purposes with a lower real price of gold, due to the elimination of private demand to hold gold as an inflation hedge; and (5) greater fiscal discipline. Returning to a gold standard would be immediately feasible for the US, the Eurozone, and Switzerland, where official gold stocks are large enough at the current price of gold to provide historically reasonable reserve ratios behind broader monetary aggregates. Other major nations (Japan, UK, China) would have to purchase gold.

Number of Pages in PDF File: 20

Keywords: Commodity money, Gold Standard, Inflation Hedge

working papers series





Download This Paper

Date posted: March 12, 2014  

Suggested Citation

White, Lawrence H., The Merits and Feasibility of Returning to a Commodity Standard (March 10, 2014). GMU Working Paper in Economics No. 14-05. Available at SSRN: http://ssrn.com/abstract=2406966 or http://dx.doi.org/10.2139/ssrn.2406966

Contact Information

Lawrence H. White (Contact Author)
George Mason University - Department of Economics ( email )
4400 University Drive
Fairfax, VA 22030
United States
Feedback to SSRN


Paper statistics
Abstract Views: 530
Downloads: 133
Download Rank: 128,794

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo5 in 0.812 seconds