RethinkingGreatDepression_C1_C2

RethinkingGreatDepression_C1_C2 - Rethinking the...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
Rethinking the Great Depression
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
The Gold Standard $20.67 = 1 oz. 1 oz. = £4.25  £10.29 mill. $50 mill. $4.86 = £1   What if American exporters can’t exchange all of the £10.29 million?  Suppose they can only exchange £8 mill. at the going rate. . . . receiving only $38,880,000  They would cash the rest out in gold: £2.29 mill. = 538, 823 oz.  They would redeem in U.S. for dollars: 538, 823 oz. = $11,120,000  Total value received = $50,000,000
Background image of page 2
The Gold Standard $20.67 = 1 oz. 1 oz. = £4.25  $50 mill. £10.29 mill. $4.86 = £1   The flow of gold from England to U.S. won’t persist over time.  gold =   MS  MS =   P inflation M•V=P•Y  gold =   MS  MS =   P deflation  U.S. exports fall, British exports rise; trade flows balanced.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Confounding The Gold  Standard
Background image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/20/2010 for the course ECO 473 taught by Professor Foster during the Spring '07 term at N. Arizona.

Page1 / 9

RethinkingGreatDepression_C1_C2 - Rethinking the...

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online