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Well, now we have empirical experience that after abolishing gold standard we still have economic crashes so getting rid of it didn't help us. So you can't real
by pi-e-sigma 3y ago
Well, now we have empirical experience that after abolishing gold standard we still have economic crashes so getting rid of it didn't help us. So you can't really claim that gold standard was actually worse at preventing crashes. But we also have undesired things that weren't possible before such as FED's ability to print unlimited amount of money. That was my initial point and I stand by it. The gold standard wasn't great but at least it kept the monetary policy anchored to the reality.
- AnimalMuppet 3y agoIf you have empirical evidence that, after abolishing the gold standard, economic crashes were still as frequent and as severe as they were under the gold standard, I'd love to see it. Until I do, I'm skeptical that any such evidence exists, because I'm pretty sure that they have not been as frequent or as severe. > The gold standard wasn't great but at least it kept the monetary policy anchored to the reality. I will agree with you that the Fed policy is less constrained by reality than it would be under the gold standard. I think the new actually works better, but I admit that the lack of constraint is a serious concern.
- pi-e-sigma 3y agoWe don't really have empirical evidence that abandoning the gold standard reduced frequency and severity of crashes, either. Gold standard (or silver) has been the norm for centuries and we are only 50 years in without it in the US. So it's all a matter of opinion.
- AnimalMuppet 3y agoIt's not only a matter of opinion. 50 years of data is not nothing.