For economic cycles, see point 5: Gold recessions could last for years.
The gold standard made the Great Depression worse; see Bernanke† and James (1991):
> However, Temin (1989) argues that, once these destabilizing policy measures had been taken, little could be done to avert deflation and depression, given the commitment of central banks to maintenance of the gold standard. Once the deflationary process had begun, central banks engaged in competitive deflation and a scramble for gold, hoping by raising cover ratios to protect their currencies against speculative attack. Attempts by any individual central bank to reflate were met by immediate gold outflows, which forced the central bank to raise its discount rate and deflate once again. According to Temin, even the United States, with its large gold reserves, faced this constraint. Thus Temin disagrees with the suggestion of Friedman and Schwartz (1963) that the Federal Reserve's failure to protect the U.S. money supply was due to misunderstanding of the problem or a lack of leadership; instead, he claims, given the commitment to the gold standard (and, presumably, the absence of effective central bank cooperation), the Fed had little choice but to let the banks fail and the money supply fall.
> For our purposes here it does not matter much to what extent central bank choices could have been other than what they were. For the positive question of what caused the Depression, we need only note that a monetary contraction began in the United States and France, and was propagated throughout the world by the international monetary standard.
I recommend Money: The True Story of a Made-Up Thing by Jacob Goldstein, which goes over some situations where various countries have switched to and from 'fiat regimes' over the course of history before the modern age.
As for economic cycles, in the GS/pre-BW regime US economic growth was 2.81% with a variation of 4.46%, while in the non-GS/post-BW world the numbers are 2.75 ±2.06%:
And the later years are also including inflation from the Vietnam War and the oil shock: hardly regular events. Take those out and the variation would probably be even lower. Once Volcker tamed the oil shock, the Fed has managed to run a pretty tight ship when it comes to inflation:
Most countries floated their currencies eventually during the Great Depression, and the sooner a country floated the sooner they started recovering.
* https://en.wikipedia.org/wiki/Gold_standard#/media/File:Grap...
* https://en.wikipedia.org/wiki/Gold_standard#Depression_and_W...
A quick summary of the main points of why the gold standard isn't as useful as a lot of people think:
* https://www.vox.com/2014/7/16/5900297/case-against-gold-stan...
For economic cycles, see point 5: Gold recessions could last for years.
The gold standard made the Great Depression worse; see Bernanke† and James (1991):
> However, Temin (1989) argues that, once these destabilizing policy measures had been taken, little could be done to avert deflation and depression, given the commitment of central banks to maintenance of the gold standard. Once the deflationary process had begun, central banks engaged in competitive deflation and a scramble for gold, hoping by raising cover ratios to protect their currencies against speculative attack. Attempts by any individual central bank to reflate were met by immediate gold outflows, which forced the central bank to raise its discount rate and deflate once again. According to Temin, even the United States, with its large gold reserves, faced this constraint. Thus Temin disagrees with the suggestion of Friedman and Schwartz (1963) that the Federal Reserve's failure to protect the U.S. money supply was due to misunderstanding of the problem or a lack of leadership; instead, he claims, given the commitment to the gold standard (and, presumably, the absence of effective central bank cooperation), the Fed had little choice but to let the banks fail and the money supply fall.
> For our purposes here it does not matter much to what extent central bank choices could have been other than what they were. For the positive question of what caused the Depression, we need only note that a monetary contraction began in the United States and France, and was propagated throughout the world by the international monetary standard.
* http://www.nber.org/chapters/c11482
† Yes, that Bernanke.
I recommend Money: The True Story of a Made-Up Thing by Jacob Goldstein, which goes over some situations where various countries have switched to and from 'fiat regimes' over the course of history before the modern age.
As for economic cycles, in the GS/pre-BW regime US economic growth was 2.81% with a variation of 4.46%, while in the non-GS/post-BW world the numbers are 2.75 ±2.06%:
* https://www.moneyandbanking.com/commentary/2016/12/14/why-a-...
And the later years are also including inflation from the Vietnam War and the oil shock: hardly regular events. Take those out and the variation would probably be even lower. Once Volcker tamed the oil shock, the Fed has managed to run a pretty tight ship when it comes to inflation:
* https://en.wikipedia.org/wiki/Great_Moderation