Recent Articles

Read more about our latest published articles.

Review’s Archive

William Miles, Department of Economics, Wichita State University, Wichita, Kansas, USA

Did the Classical Gold Standard Promote Inflation Convergence?

(pp. )
JEL classification: E30; F33; N00
Keywords: Inflation; Gold Standard; Exchange Rate Regimes


Adherence to the classical gold standard entailed nominal exchange rate rigidity between member countries.  A failure of price levels to co-move between members would thus lead to real exchange rate misalignment, with potential trade imbalances and financial crises following.  We examine inflation differentials between gold standard (and for comparison, non-gold standard) members.  Results indicate generally less correlation of prices across countries than in subsequent Bretton Woods and floating regimes.  Examination of inflation differentials indicates a general but not universal pattern of less persistence in these differences during the gold standard than in later monetary regimes.  The lesser persistence in differentials, however, might not be attributable to gold adherence, as some of the pairs had a country rarely or never pegged to gold.  In addition, previous research has found fewer nominal rigidities in the classical gold standard years, making for easier price adjustment.  Finally, we use the sequential panel selection method (SPSM) with panel unit root tests over the gold standard.  We find there is no pattern between gold adherence and the persistence of inflation differentials.  Overall, results suggest little if any impact of gold adherence on inflation co-movement between countries.

Read the full article

Download the article in PDF format to read and print.


Acocella, N. (2020) “To Exit or not to Exit (from the EMU?)”, Economia Internazionale/International Economics, 73(3), 1-20.

Bayoumi, T. and B. Eichengreen (1994) “One Money or Many? Analyzing the Prospects for Monetary Unification in Various Parts of the World”, Princeton Studies in International Finance, No. 76, Department of Economics, Princeton University.

Bayoumi, T, and B, Eichengreen (1996) Modern Perspectives on the Gold Standard, in: T. Bayoumi, B. Eichengreen, M. Taylor (Eds), “Modern Perspectives on the Gold Standard”, Cambridge University Press.

Bazot, G., E. Monnet and M. Morys (2022) “Taming the Global Financial Cycle: Central Banks as Shock Absorbers in the First Era of Globalization”, Journal of Economic History, 82(3), 801-839.

Bordo, M. (1993) “The Gold Standard, Bretton Woods, and other Monetary Regimes: A Historical Reappraisal”, Federal Reserve Bank of St. Louis Review, 75(2), 123-191.

Bordo, M. and H. James (2015) “Capital Flows and Domestic and International Order: Trilemmas from Macroeconomics to Political Economy and International Relations”, National Bureau of Economic Research Working Paper No. 21017.

Bordo, M., J. Landon-Lane and A. Redish (2010) “Deflation, Productivity Shocks and Gold: Evidence from the 1880-1914 Period” Open Economies Review, 21(4), 515-546.

Bordo, M. and H. Rockoff (1996) “The Gold Standard as a ‘Good Housekeeping Seal of Approval’”, The Journal of Economic History, 56(2), 389-428.

Busetti, F., L. Forni, A. Harvey and F. Venditti (2007) “Inflation Convergence and Divergence within the European Monetary Union”, International Journal of Central Banking, 3(2), 95-121.

Caporale, G. and L. Gil-Alana (2020) “Fractional Integration and the Persistence of UK Inflation 1210-2016” Economic Papers, 39(2), 162-166.

Chernyshoff, N. D. Jacks and A. Taylor (2009) “Stuck on Gold: Real Exchange Rate Volatility and the Rise and Fall of the Gold Standard, 1875-1939”, Journal of International Economics, 77(2), 195-205.

Chiu, E., S. Dechsakulthorn, S. Walter, J. Walton and T. Willett (2012) “The Discipline Effects of Fixed Exchange Rates: Constraint versus Incentive Effects and the Distinction between Hard and Soft Pegs”,  Global Economic Review, 41(1), 1-31.

Chortareas, G. and G. Kapetanios (2009) “Getting PPP Right: Identifying Mean-Reverting Real Exchange Rates in Panels”, Journal of Banking and Finance, 33(2), 390-404.

Ciccarelli, M. and B. Mojon (2010) “Global Inflation”, The Review of Economics and Statistics, 92(3), 524-535.

Darby, M. and J. Lothian (1989) “The International Transmission of Inflation Afloat”, in: M. Bordo (Ed.), “Money, History and International Finance: Essays in Honor of Anna J. Schwarz”, 203-244, University of Chicago Press. 

Dridi, J. and A. Nguyen (2019) “Assessing Inflation Convergence in the East African Community”, Journal of International Development, 31(2), 119-136.

Eichengreen, B. and R. Hausmann (1999) “Exchange Rates and Financial Fragility”, National Bureau of Economic Research Working Paper 7418.

Flandreau, M. and M. Maurel (2005) “Monetary Union, Trade Integration, and Business Cycles in Nineteenth Century Europe”, Open Economies Review, 16(2), 135-152.

Ferguson, N. and M. Schularick (2006) “The Empire Effect: The Determinants of Country Risk in the First Age of Globalization 1880-1913”, The Journal of Economic History, 66(2), 283-312.

Gnagne, P. and L. Bonga-Bonga (2020) “The Impact of Exchange Rate Volatility on the Security Markets in BRICs Economies”, Economia Internazionale/International Economics, 73(1), 21-50.

Gupta, R., C. André and L. Gil-Alana (2015) “Co-Movement in Euro Area Housing Prices: A Fractional Cointegration Approach”, Urban Studies, 52(16), 3123-3143.

Hansen, B. (1992) “Testing for Parameter Instability in Linear Models”, Journal of Policy Modeling, 14(4), 517-533.

Jordà, O., M. Schularick and A. Taylor (2020) “The Effects of Quasi-Random Monetary Experiments”, Journal of Monetary Economics, 112(C), 22-40.

Lare-Lantone, K. and E. Anoruo (2022) “West African Monetary Union and Colonial Ties”, Economia Internazionale/International Economics, 75(3), 323-362.

Miles, W. (2015) “Did the Classical Gold Standard Lead to Greater Price Level Convergence? A New Approach”, Open Economies Review, 26(2), 351-477.

Mink, M., J. Jacobs and J. de Haan (2012) “Measuring Coherence of Output Gaps with an Application to the Euro Area”, Oxford Economic Papers, 64(2), 217-236.

Officer, L. (1996), Between the Dollar-Sterling Gold Points: Exchange Rates, Parity and Market Behavior, Cambridge University Press. 

Pittaluga, G.B. (2023) “The Genova Conference of 1922: A Reassessment after 100 Years”, Economia Internazionale/International Economics, 76, forthcoming. 

Pittaluga, G.B. and E. Seghezza (2021) The Classical Gold Standard, in: G.B. Pittaluga, E. Seghezza (Eds), “Building Trust in the International Monetary System”, Springer Cham: Switzerland.

Upadhyaya, K., F. Mixon and R. Bhandari (2020) “Exchange Rate Volatility and its Impact of China’s Trade with the United States”, Economia Internazionale/International Economics, 73(3), 373-388.

Register your account

First-time users should click on “Register your account” and enter the requested information. Upon successful registration, you will receive an e-mail with instructions to verify your registration.

Submission Guidelines

Authors’ login

Use the assigned user ID and password to login. Please, do not register again. Usernames and passwords may be changed after.

Quick search by author:
Back to the top

Institute for International Economics
of the Genoa Chamber of Commerce

Istituto di Economia Internazionale
Camera di Commercio di Genova
Via Garibaldi, 4 (III piano) - 16124 Genova (Italy)