TY  - JOUR
AU  - Bordo,Michael
AU  - Edelstein,Michael
TI  - Was Adherence to the Gold Standard a "Good Housekeeping Seal of Approval" During the Interwar Period?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7186
PY  - 1999
Y2  - June 1999
UR  - http://www.nber.org/papers/w7186
L1  - http://www.nber.org/papers/w7186.pdf
N1  - Author contact info:
Michael D. Bordo
Department of Economics
Rutgers University
New Jersey Hall
75 Hamilton Street
New Brunswick, NJ 08901
Tel: 732/822-7152
Fax: 732/932-7416
E-Mail: bordo@econ.rutgers.edu

Michael Edelstein
E-Mail: edelsteincpa@juno.com
AB  - World War I dramatically altered the world's financial landscape. Most countries left the gold standard, and New York replaced London as the major lender in world capital markets. This paper discusses how the gold exchange standard was reconstructed in the 1920s. We show that the U.S. capital market viewed returning to the gold standard as a signal of financial rectitude, what we have referred to in other work as a 'Good Housekeeping Seal of Approval.' When countries returned to gold, especially when they did so at the prewar parity, they were rewarded with the ability to borrow at substantially lower interest rates. Other signals of financial rectitude, such as small fiscal deficits, apparently carried little weight with lenders.
ER  -