NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Gold-Exchange Standard and the Great Depression

Barry Eichengreen

NBER Working Paper No. 2198
Issued in March 1987
NBER Program(s):   ITI   IFM

A number of explanations for the severity of the Great Depression focus on the malfunctioning of the international monetary system. One such explanation emphasizes the deflationary monetary consequences of the liquidation of foreign-exchange reserves following competitive devaluations by Great Britain and her trading partners. Another emphasizes instead the international monetary policies of the Federal Reserve and the Rank of France. This paper analyzes both the exceptional behavior of the U.S. and France and the shift out of foreign exchange after 1930. While both Franco-American gold policies and systemic weaknesses of the international monetary system emerge as important factors in explaining the international distribution of reserves, the first of these factors turns out to play the more important role in the monetary stringency associated with the Great Depression.

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Document Object Identifier (DOI): 10.3386/w2198

Published: Eichengreen, Barry. Elusive Stability: Essays in the History of International Finance 1919-1939. New York: Cambridge University Press, 1990.

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