Ben Bernanke’s essays say that staying on the gold standard caused the depression.
“Bernanke rigorously explains the economics of the Great Depression – the holy grail of economics. For a long time there were different theories as to what caused the Depression, but recent rigorous economic studies, especially from an international perspective, have determined through massive data that the new, flawed gold standard of the 1920s was the main cause of the Great Depression. The banking collapse also was a major cause, as well as other lesser causes.
Bernanke shows that one country after another joined the flawed gold standard of the 1920’s, which caused a massive monetary contraction. The Great Depression quickly followed. The countries that abandoned the gold standard the soonest, such as Britain, were the ones that faired the best. The countries that clung to the gold standard the longest, such as France, were the ones that suffered the longest. The countries that were not on the gold standard avoided a Great Depression!…”
Do you think it’s true – that the gold standard limits economic growth, because you cannot grow beyond the amount of gold in existence?
