International monetary regimes: The interwar gold exchange standard

Abstract

Historical accounts of the international monetary system generally oppose the classical gold standard of 1880-1914 and its interwar successor of 1925-1931. While the pre-WW1 gold standard is usually described as a paragon of international monetary and price stability, its interwar version remains associated with memories of foreign exchange market turbulence, global deflation, and, of course, the Great Depression. This chapter provides an overview of the interwar gold exchange standard system. How did this system emerge in the 1920s? How was it implemented in practice? Why did it collapse in the 1930s? And what was the link between the interwar gold exchange standard and the Great Depression?.