Gold as money
Gold has always played an important role in the international monetary system. Gold coins were first struck on the order of King Croesus of Lydia (an area that is now part of Turkey), around 550 BC. They circulated as currency in many countries before the introduction of paper money. Once paper money was introduced, currencies still maintained an explicit link to gold (the paper being exchangeable for gold on demand).
By the late 19th Century, many of the world’s major currencies were fixed to gold at a set price per ounce, under the ‘Gold Standard’.
The Gold Standard persisted in different forms for about one hundred years. Read more about how it worked in practice, its advantages and disadvantages, and whether today’s major trading economies might ever return to a Gold Standard.
- classical Gold Standard
- Advantages and Disadvantages
- The Bretton Woods system
- Returning to the Gold Standard ?
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