Golden fetters

Abstract

The gold standard was the mechanism that transmitted the destabilizing impact from the U.S. to the rest of the world, and the key to understanding the Great Depression of the thirties. The monetary system ordering international trade before the First World War was a multilateral payments system based on gold and also with fixed exchange rates seemed to have all advantages and few limitations. Thus began a new era. For over a quarter century before the First World War, the gold standard was the framework for national and international monetary relations.