THE FLEXIBILITY OF THE GOLD-EXCHANGE STANDARD AND ITS LIMITS*
Johns Hopkins University
This paper presents an analysis, mainly in graphical terms, of the gold-exchange standard, reduced to its essential features. Mundell’s analysis of what he called the crisis problem  seems to have been the first attempt to formalize the working of the system in the framework of a theoretical model. The present paper is intended as a further step in the same direction. In contrast to Mundell, it emphasizes long-run growth equilibrium rather than the dynamics of control and possible collapse. It has been correctly observed that the working of the gold-exchange standard is in many respects similar to bimetallism . In ...