web3/concepts/gold-standard.md

Gold Standard

A monetary standard for a currency based on precious metals, espoused as sound-money in austrian-economics.

Criticisms

Very few mainstream economists believe the gold standard to be a good way to run a currency anymore. Historically there have been many problems over the now-standard fiat money system.

• Unequal distribution of gold across Earth gives certain countries and groups unequal access to value detached from economic activity and based purely on geography.
• Limits the amount of economic growth because supply is limited.
• Does not allow market intervention during recessions.
• Short-term price volatility.
• Deflationary currencies encourage hording and punish debtors.
• Gold mining and production is not predictable on long time scales.
• Shocks in one economic region transfer to other regions. (Great Depression & World War II)ss

Essays

1. [@bernanke_essays_2004]
2. [@krishna_when_2017]