Discounting the differences between the self-regulating classical gold standard that prevailed before World War I and the government-managed gold-exchange standard that replaced it, many writers have erroneously blamed “the gold standard” for the inability of Federal Reserve Board policymakers to implement countercyclical policies in 1929–33 and thus to prevent the Great Depression. Worse, they have failed to identify the true culprit in the monetary system of that era—the fallacious real bills doctrine, which guided Fed policy.

Richard H. Timberlake, Jr. (1922–2020) was Professor Emeritus of Economics at the University of Georgia and co-editor of Money and the Nation State: The Financial Revolution, Government, and the World Monetary System.
Economic History and DevelopmentEconomic PolicyEconomyFederal Budget PolicyFiscal Policy/DebtTaxes and Budget