Why did we abandon the gold standard?
In: Economics
In my understanding i think the gold standard has limits on economic growth and expansion. holding onto the gold standard will create deflationary problems on your currency. This basically means invesotrs and consumers would end up holding on to the currency for future use instead of spending.
Typically you want your currency to inflate by 2-3% each year for a healthy growth.
its also important to note gold standard is also a form of Fiat currency. Instead of being pegged to CPI its pegged to a value of gold.
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