All the king’s horses, and all the king’s men — The Genoa Conference and the Gold Standard

Source: EconLog
by John Phelan

“A century ago, many of the world’s great statesmen gathered in the Italian city of Genoa to build a monetary order for the post-war world. Before 1914, the world’s leading economies had been on the classical gold standard. This was based on convertibility between paper money and gold at a fixed parity price and the free export and import of gold. … The First World War shattered this system. Countries financed their war efforts by printing money and convertibility and exportability were suspended. Between 1914 and 1918, total metallic reserves as a share of bank notes plus deposits fell from 63 to 1 percent in Austria-Hungary, 57 to 10 percent in Germany, 60 to 9 percent in Italy, 64 to 17 percent in France, and 40 to 33 percent in Britain. This caused rampant inflation, followed by a bust.” (06/19/22)