Professional Documents
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Global Monetary
Global Monetary
CHAPTER
9
The Global Monetary
System
Monetary System
• Gold Standard
– Currencies pegged to the value of gold;
convertibility guaranteed
– By 1880 most countries were on the gold standard
– Achieves balance of trade equilibrium for all
countries (value of exports equals value of imports);
flow of gold was used to make up differences
– Abandoned in 1914; attempt to resume after WWI
failed with Great Depression
• Bretton Woods (1944)
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