AdvantageoftheGoldStandard.pptVIP

Advantage of the Gold Standard Because there are N currency and N prices of gold in terms of those currencies, no single country occupies a privileged position within the system: each is responsible for pegging its currency’s price in terms of the official international reserve asset, gold. Gold standard rules also require each country to allow unhindered imports and exports of gold across its borders. Benefits and drawbacks of the Gold Standard Benefits: Symmetry Price level and value of national money are more stable and predictable Enhance international transactions Drawbacks: Constraint