News Links: Does Austerity Promote Economic Growth?

  1. Dave Holden says

    Excellent (Audio) discussion at EconTalk on how France not adhering to the gold standard contributed to the great depression.

    “Irwin argues that France systematically accumulated large amounts of
    gold in the late 1920s and 1930s, imposing massive deflation on the rest
    of the world”

    1. Oldrich says

      I don’t know. I am definitely not the one with sufficient knowledge and intellectual background to argue this and I do know there are many folks there who are extremely passionate about gold and who have invested enormous amount of time into its study. 
      All I have read is the Pulitzer prize winning “Lords of finance” , on which the author Liaquat Ahamed worked for I believe 6 years, on the Great Depression and the decision to adhere gold standard is stated as the most important factor that contributed to the Great Depression as tied the amount of currency in circulation to the quantity of gold in its vaults. 
      And if I am not mistaken the foremost contemporary scholar on the problematics of Great Depression  Ben Bernanke  arrived to the same conclusion. 
      Also recently I watched video with N.Roubini where he called the proponents of Gold standard “loons and hacks” and repeated that the Gold standard was a major cause of Great Depression…..

      1. Dave Holden says

        Hi oldrich,

        The EconoTalk doesn’t advocate the gold standard, in fact I’m not sure it would disagree with the “Lords of finance” book (sorry not read this). The two main points I took from it were that the UK went back on the gold standard at the wrong rate – forcing it to deflate and that France, by not adhering to the standard and accumulating gold led to further deflation both in the UK and ultimately the US. I highly recommend giving it a listen, it’s a very accessible discussion.

        1. Oldrich says

          Thank you for clarification.

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