Marginal Revolution: Did France cause the Great Depression? - 0 views
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The gold standard was a key factor behind the Great Depression, but why did it produce such an intense worldwide deflation and associated economic contraction?
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France increased its share of world gold reserves from 7 percent to 27 percent between 1927 and 1932 and effectively sterilized most of this accumulation. This “gold hoarding” created an artificial shortage of reserves and put other countries under enormous deflationary pressure.
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The results indicate that France was somewhat more to blame than the United States for the worldwide deflation of 1929-33.