International monetary system
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The document discusses different types of international monetary systems throughout history including bimetallism, monometallism, paper standards, and commodity standards using barter and precious metals like gold and silver coins. It outlines the gold standard system in more detail, including gold currency standards, bullion standards, and exchange standards. It provides conditions for the successful functioning of these systems and reasons for the eventual breakdown of the gold standard, including uneven gold distribution among countries and trade restrictions straining political relations during World War I.
International monetary system
- 1. International monetary system Bimetallism standard Monometallism standard Paper standard
- 2. Commodity standard Barter Precious metals Coins • Full bodied • Debased
- 3. Gold standard Gold currency standard Gold bullion standard Gold exchange standard
- 4. Conditions for successful functioning • No restriction on movement of gold • Governments should no offset the effect of gold movements • Central banks act as apex bodies to hold gold reserves • Unrestricted minting and melting at the option of holder
- 5. Reasons for breakdown of gold standard • Uneven distribution of gold USA and France had a bulk of it • Some countries imposed restriction on trade • World war in 1914 strained political relations between countries