Crisis and Opportunity

Barry Eichengreen

in Golden Fetters

Published in print July 1996 | ISBN: 9780195101133
Published online November 2003 | e-ISBN: 9780199869626 | DOI:
Crisis and Opportunity

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This is the third of three chapters that consider the operation of the reconstructed gold standard system following World War I. It describes the desperate attempts of policy makers to defend the gold standard and analyzes their role in aggravating the Great Depression. At the same time, it suggests that the collapse of the system provided new opportunities for constructive action. The Chinese character for ‘crisis’ combines the symbols for ‘danger’ and ‘opportunity’, and the point made in this chapter (Crisis and Opportunity) is much the same. The different sections of the chapter look at the links between domestic and international financial systems, the Austrian crisis of 1931 (which led, in effect, to it no longer being part of the gold standard system), the spread of the crisis to other countries, the abandonment of the gold standard by Britain, and the implications – which were that the stage had now been set for the collapse of the gold standard system.

Keywords: abandonment of the gold standard; Austria; collapse of the gold standard; domestic financial systems; economic crisis; gold standard; Great Depression; international financial systems; interwar period; reconstructed gold standard

Chapter.  13801 words.  Illustrated.

Subjects: Economic History

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