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The Gold Standard and the International Dimension of the Great Depression

Author

Listed:
  • Luca Pensieroso

    (UCL IRES - Institut de recherches économiques et sociales - UCL - Université Catholique de Louvain = Catholic University of Louvain)

  • Romain Restout

    (UCL IRES - Institut de recherches économiques et sociales - UCL - Université Catholique de Louvain = Catholic University of Louvain, BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique)

Abstract

Was the Gold Standard a major determinant of the onset and protracted character of the Great Depression of the 1930s in the United States and worldwide? In this paper, we model the ‘Gold-Standard hypothesis' in an open-economy, dynamic general equilibrium framework. We show that encompassing the international and monetary dimensions of the Great Depression is important to understand the turmoil of the 1930s. In particular, the Gold Standard turns out to be a strong transmission mechanism of monetary shocks from the United States to the rest of the world. Our results also suggest that the waves of successive nominal exchange rate devaluations coupled with the monetary policy implemented in the United States might not have enhanced the recovery.

Suggested Citation

  • Luca Pensieroso & Romain Restout, 2023. "The Gold Standard and the International Dimension of the Great Depression," Post-Print hal-04264183, HAL.
    • Handle: RePEc:hal:journl:hal-04264183
    DOI: 10.2139/ssrn.4183413
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    More about this item

    Keywords

    Great Depression; Gold Standard; Open Macroeconomics; Dynamic General Equilibrium;
    All these keywords.

    JEL classification:

    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • N01 - Economic History - - General - - - Development of the Discipline: Historiographical; Sources and Methods

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