Essay Examples on Fairmont State University

Following the Great Depression

Following the Great Depression the world witnessed for the second time the interaction between the international monetary regime and trading system which occurred between 1869 and 1913 This previous interaction was a very positive one portrayed by the gold standard system which linked nations for decades through a the agreement of certain exchange rates This pre World War I system allowed the free movement of capital and goods but also facilitated and promoted the growth of trade Lopez Cordova and Meissner 2003 argue that about 1 5 of the growth in trade between 1880 and 1910 is due to the security provided by the gold standard as well as the low trade barriers that were in place over this period Estevadeordal Frantz and Taylor 2003 The gold standard system was put to the side during World War I as all the nations taking part into the war started placing barriers to slow gold exports as much as possible By 1915 all but the United States had shortened the link between gold and their central bank currency By the end of the end of the war the gold standard was reintroduced as the gold exchange standard it relied mainly on the use of foreign exchange reserves at a time where the sterling was no longer the economic leader it was before the war and where the dollar was not ready to become the leader it will become 



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