A monetary standard for a currency based on precious metal commodities, espoused as sound money in Austrian economics.
Very few mainstream economists believe the gold standard to be a good way to run a currency. Historically there have been many problems over the now-standard fiat money system. Common criticisms of the gold standard include:
- 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)
See also sound money and Austrian economics.
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