3 ms·
You seem to be mixing inflation of the money supply with inflation of the value of money. There is strong causality there, but it isn't the only cause. Consid
by slg 3y ago
You seem to be mixing inflation of the money supply with inflation of the value of money. There is strong causality there, but it isn't the only cause. Considering the money supply is the primary cause we have control over, going back to the gold standard creates greater risk of other causes like supply or demand shocks harming the economy as we would no longer be able to nudge inflation in the desired direction to counteract those other causes.
And if the primary remaining benefit of the gold standard is to rein in government spending, I would simply argue there are other ways to do that. It seems like throwing the baby out with the bath water to give up control of monetary policy in order to better control fiscal policy.