How did economy function with the gold standard still in place?

Question

Ranging from medieval times when gold was the only currency, to modern times until the currency was pegged against the gold standard, how good/bad was the economy?
Was there any inflation? If so, how did it occur without artificial manipulation of the economy.

In: 79

Answer 1

The economy was a lot more volatile. Some other country hoarding gold could cause a depression. A new gold strike could cause inflation. Recessions were harder to get out of. Inflation was much less over long periods of time due to alternating periods of inflation and deflation.