Working Paper: NBER ID: w21380
Authors: Sebastian Edwards
Abstract: In this paper I revisit the period leading to the abandonment of the gold standard by the U.S. in 1933. I analyze what the important players – and in particular FDR and the members of the advisory group known as the “Brains Trust” – thought about the gold standard. My conclusion is that during the primary and presidential campaigns, neither Roosevelt nor his inner circle had a strong view on gold or the dollar. They did believe in the need to experiment with different policies in order to get the country out of the slump. Tinkering with the value of the currency was a possible area for experimentation; but it was an option with a relatively low priority, lower than implementing a public works program, and passing a bill that included crops allotment. Until inauguration day FDR’s views on the gold standard were ambivalent and noncommittal; he was neither a diehard fan of the system, nor was he a severe critic.
Keywords: Gold Standard; Great Depression; FDR; Brains Trust
JEL Codes: B2; B22; B26; E31; F31; N12; N22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Lack of strong views on the gold standard among FDR and his advisors (E49) | Preference for experimenting with various economic policies (E65) |
| Preference for experimenting with various economic policies (E65) | Low priority for currency devaluation compared to other policies (F31) |
| Ambivalence towards the gold standard (E42) | Hesitant approach to monetary policy (E52) |
| Economic crisis (G01) | Abandonment of the gold standard (F33) |