TY  - JOUR
AU  - Eichengreen,Barry
AU  - Temin,Peter
TI  - Fetters of Gold and Paper
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 16202
PY  - 2010
Y2  - July 2010
UR  - http://www.nber.org/papers/w16202
L1  - http://www.nber.org/papers/w16202.pdf
N1  - Author contact info:
Barry Eichengreen
Department of Economics
University of California, Berkeley
549 Evans Hall 3880
Berkeley, CA 94720-3880
Tel: 510/642-2772
Fax: 510/643-0926
E-Mail: eichengr@econ.Berkeley.edu

Peter Temin
Department of Economics
MIT, Room E52-271A
50 Memorial Drive
Cambridge, MA  02142-1347
Tel: 617/253-3126
Fax: 617/253-1330
E-Mail: ptemin@mit.edu
AB  - We describe in this essay why the gold standard and the euro are extreme forms of fixed exchange rates, and how these policies had their most potent effects in the worst peaceful economic periods in modern times.  While we are lucky to have avoided another catastrophe like the Great Depression in 2008-9, mainly by virtue of policy makers' aggressive use of monetary and fiscal stimuli, the world economy still is experiencing many difficulties.  As in the Great Depression, this second round of problems stems from the prevalence of fixed exchange rates.  Fixed exchange rates facilitate business and communication in good times but intensify problems when times are bad.
ER  -