Key issues Exchange rate regimes and their implications for the world economy Possibilities of policy co-ordination Policy co-ordination in Europe The gold standard Characteristics of the gold standard: –The government of each country fixes the price of gold in terms of its domestic currency. –The government maintains convertibility of domestic currency into gold. –Domestic money creation is tied to the government's holding of gold. Adjustment to full employment is via domestic wages and prices –creating vulnerability to long and deep recessions.
