Why did the Gold Standard make it hard to create jobs?


This video talks about a disadvantage of the Gold Standard. Specifically we discuss how a country with high unemployment often found itself with some unpleasant options to choose from when trying to stimulate job creation. The most common way to decrease unemployment was to first decrease wages in an economy such that exports were made cheaper, creating more demand for goods and leading to an inflow of gold, which ultimately lead to an increase in employment. This first step of decreasing wages was often extremely difficult for governments to do.

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