Gold and the Uneasy Case for Responsibly Managed Fiat Money

  • William Fellner
Part of the Trade Policy Research Centre book series (TPRC)


In a world in which policy makers who are short-run oriented persist in creating inflationary pressures at rates that cannot be predicted without large margins of error, floating provides the only acceptable exchange-rate arrangement. Lack of predictability is an essential property of such an inflationary setting, because even the limited, short-run stimulus derived from inflation would be unattainable if the inflation rate were correctly foreseen. Thus, to maintain the stimulus, inflation must be accommodated for a while at an accelerating rate, but full accommodation must occasionally be interrupted to prevent the process from getting out of hand at a very early stage. The resulting environment is one of heightened uncertainty and of lowered efficiency.


Monetary Authority Official Price Average Yearly Rate Real Price Gold Price 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Notes and References

  1. 2.
    Aside from the sources listed under the table, I made use largely of data found in W. John Busschau, Gold and International Liquidity: the Flow of Credit in Relation to Gold in the International Monetary System (Johannesburg: South African Institute of International Affairs, 1961); Peter A. Abken, ‘The Economics of Gold Price Movements’, Economic Review of the Federal Reserve Bank of Richmond, March–April 1980;Google Scholar
  2. W. C. Butterman, ‘Gold’, in the United States Department of the Interior, Bureau of Mines, Minerals Yearbook 1978–79 (Washington: US Government Printing Office, 1979); Hearings Before the Senate Committee on Banking, Housing and Urban Affairs, 96th Congress, S. 2704, 29–30 May 1980 (Washington: US Government Printing Office, 1980), pp. 466 et seq.; estimates used by Edward M. Bernstein in the EMB Reports and kindly put at my disposal;Google Scholar
  3. Phillip Cagan, Determinants and Effects of Changes in the Stock of Money, 1875–1960, Studies in Business Cycles No. 13 (New York and London: Columbia University Press, for the National Bureau of Economic Research, 1965);Google Scholar
  4. Joseph Kitchin, ‘Gold’, in Encyclopaedia of the Social Sciences Vol. VI, (New York: Macmillan, 1931), pp. 689–93; and International Financial Statistics Yearbook 1979 (Washington: International Monetary Fund, 1980). Abken and Bernstein, as well as myself, have made substantial use inter alia of the estimates of Consolidated Gold Fields Ltd, London.Google Scholar
  5. 3.
    Herbert Giersch, Allgemeine Wirtschaftspolitik, Vol. 2: Konjunktur- und Wachstumspolitik in der offenen Wirtschaft, Die Wirtschaftswissenschaften, Reihe B: Volkswirtschaftslehre, Beitrag Nr 10 (Wiesbaden: Gabler, 1977), pp. 177 et seq. CrossRefGoogle Scholar

Copyright information

© Trade Policy Research Centre 1983

Authors and Affiliations

  • William Fellner

There are no affiliations available

Personalised recommendations