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Describe the alternative theories of the functioning of the pre-1914 gold standard as summarized by Eichengreen. Discuss the role that the breakdown of the gold standard played in causing the Great Depression. Finally, what ended the great depression - Thesis Example

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Theories of the Functioning of the pre-1914 gold standard: The price spicie flow model, monetary approach, capital flows approach and the hegemonic stability theory provide useful insights regarding the operation of this financial system
How the gold standard system contributed…
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Describe the alternative theories of the functioning of the pre-1914 gold standard as summarized by Eichengreen. Discuss the role that the breakdown of the gold standard played in causing the Great Depression. Finally, what ended the great depression
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Extract of sample "Describe the alternative theories of the functioning of the pre-1914 gold standard as summarized by Eichengreen. Discuss the role that the breakdown of the gold standard played in causing the Great Depression. Finally, what ended the great depression"

Download file to see previous pages Historical accounts indicate that economies have always taken practical steps to ensure that their financial systems were consistent with the economic policies that the respective economies adopt. This does not only enhance stability, but it also prevents financial related problems that have lasting implications on the holistic wellbeing of the society. Before 1914, the gold standard financial system was solely used as a monetary system during this period. Using his, it is widely agreed that the society was able to ensure income and price stability in the society. However, to ensure optimal functioning, certain policies were adopted to govern its use. These ranged from the need for each country to have a fixed currency to the requirement for free flow of gold between the countries that were within the respective region. It is against this background that this paper provides an explicit review of the theories detailing the functioning of the gold standard during this period. Further, it explore show this monetary system contributed to the great depression. Finally, it details factors that led to the end of the great depression.
The functioning of the gold standard monetary system was reportedly complex and intricate. Various factors were required for effective assumption of this financial system by the then economy. Notably, different parties played distinct roles in ensuring that the financial system yielded optimal outcomes. These are well documented n a host of theories or models that seek to explain the relative financial behavior. In his research, Eichengreen cites David Hume’s price spicie flow model (Einchengreen 234).
This has three distinct features whose interplay contributes to the stability of the financial system in different ways. To begin with, it operates in an environment where only financial assets and goods or products are traded on a global scale. This implies that possible trade ...Download file to see next pagesRead More
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