Homework Question on The Good Old Days of the Gold Standard
- “The Good Old Days of the Gold Standard? Not Really, Historians Say,” The New York Times, 12/1/2015, on Blackboard. *Pugel on the gold standard, chp. 20, pp. 492-497; chp. 25, pp. 640-642.
- You are writing an issue white paper for your favorite US presidential candidate for 2016 (yes, it could be you). Write a 3-4 page paper on the main arguments for returning to the gold standard and the main arguments against, and resolve the issue for your candidate.
- For additional credit, explain why central bankers were finally convinced to abandon the gold standard in the 1930s.
- Your paper should be typed,
- Avoid excessive quotation or paraphrasing.
- The paper should follow the APA style for in-text references (and all quotations must be accompanied with in-text citations), for example (Partnoy 2009: 189), and for the References page if one is required. Examples of this style can be found at http://www2.liu.edu/cwis/cwp/library/workshop/citapa.htm
- You may use sources outside the assigned readings if you wish, but you must use the assigned readings. Any outside sources must be included in a References page and appropriately cited, quoted or paraphrased in your paper.
- Wikipedia is not a credible source.
Homework Answer on The Good Old Days of the Gold Standard
Arguments for reverting to applying the gold standard
There have been debates and concerns about the gold standards, with a clique of politicians from the Republican Party in the US pushing for its embrace. However, economists in the US and around the world have strongly opposed the ideology citing numerous flaws and shortcomings of the gold standard. Essentially, the government of the United States should contemplate reverting to applying the gold standard if economic benefits are to be witnessed.
Appelbaum notes that since the gold standard was abandoned, the Fed has struggled to revive economic growth although the efforts have seen it loosen its hold on inflation. In this respect, reverting to applying the gold standard would see the limitation of the ability of the Fed to print or create money, a move that, results in price instability, and, in turn, jeopardizes economic growth.
Appelbaum also argues that the current monetary policies in the US has given the Fed the freedom to create money, and this makes it difficult to control government spending, which remains one of the challenges in the United States and other countries. Irrefutably, reverting to applying the gold standard would be fundamental in constraining government spending, and this underscores the push by Republicans for reverting to the policy.