Why did the Gold Standard control inflation so well?


An examination of how the Gold Standard kept price levels in check. An increased/decreased price level in one country was countered by a flow of gold out of/into the country through the trade imbalance mechanism. This offsetting flow of gold would neutralize the change in the price level.

Videos to watch before

  1. What restrictions did the Gold Standard impose on member countries?
  2. Does an increasing money supply always cause inflation?