Gold Monetization and Gold Discipline

Robert P. Flood, Peter M. Garber

NBER Working Paper No. 544
Issued in September 1980
NBER Program(s):   EFG

The paper is a study of the price level and relative price effects of a policy to monetize gold and fix its price at a given future time and at the then prevailing nominal price. Price movements are analyzed both during the transition to the gold standard and during the post-monetization period. The paper also explores the adjustments to fiat money which are necessary to ensure that this type of gold monetization is non-inflationary. Finally, some conditions which produce a run on the government's gold stock leading to the collapse of the gold standard and the timing of such a run are examined.

(416 K)

Published: Flood, Robert P. and Peter M. Garber. "Gold Monetization and Gold Discipline." Journal of Political Economy, Vol. 92, No. 1, (February 1984).

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