THE FLEXIBILITY OF THE GOLD-EXCHANGE STANDARD AND ITS LIMITS*
Johns Hopkins University
I INTRODUCTION
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 [5] 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 [1]. In ...
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