TY  - BOOK
AU  - Fernández-Villaverde,Jesús
AU  - Sanches,Daniel
ED  - National Bureau of Economic Research.
TI  - A Model of the Gold Standard
T2  - NBER working paper series
PY  - 2022///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
KW  - Monetary Systems • Standards • Regimes • Government and the Monetary System • Payment Systems
KW  - jelc
KW  - Central Banks and Their Policies
KW  - Banks • Depository Institutions • Micro Finance Institutions • Mortgages
N1  - September 2022; Hardcopy version available to institutional subscribers
N2  - The gold standard emerged as the international monetary system by the end of the 19th century. We formally study its properties in a micro-founded model and find that the scarcity of the world gold stock not only results in a suboptimal output of goods that are purchased with money but also subjects the domestic economy of a country to external shocks. The creation of inside money in the form of private credit instruments adds to the money supply, usually resulting in a Pareto improvement, but opens the door to the international transmission of banking crises. These properties of the gold standard can explain the limited adherence by peripheral countries because of the potential risks to their economies. We argue that the gold standard can be sustainable at the core but not at the periphery
UR  - https://www.nber.org/papers/w30457
UR  - http://dx.doi.org/10.3386/w30457
ER  -