The gold standard is a monetary system in which the standard economic unit of account is a fixed weight of gold. There are distinct kinds of "gold standards". First, the gold specie standard is a system in which the monetary unit is associated with circulating gold coins, or with the unit of value defined in terms of one particular circulating gold coin in conjunction with subsidiary coinage made from a less valuable metal.
Similarly, the gold exchange standard typically does not involve the circulation of gold coins. Rather, it uses notes or coins made of silver or other metals, but where the authorities guarantee a fixed exchange rate with another country that is on the gold standard. This creates a de facto gold standard, in that the value of the silver coins has a fixed external value in terms of gold that is independent of the inherent silver value. Finally, the gold bullion standard is a system in which gold coins do not circulate, but in which the authorities have agreed to sell gold bullion on demand at a fixed price in exchange for circulating currency.
No country currently uses the gold standard as the basis of its monetary system, although several hold substantial gold reserves.
Read more about Gold Standard: Theory, Advocates of A Renewed Gold Standard, Gold As A Reserve Today
Famous quotes containing the words gold and/or standard:
“‘Tis not the balm, the sceptre, and the ball,
The sword, the mace, the crown imperial,
The intertissued robe of gold and pearl,
...
Not all these, laid in bed majestical,
Can sleep so soundly as the wretched slave
Who with a body filled and vacant mind
Gets him to rest, crammed with distressful bread.”
—William Shakespeare (1564–1616)
“As in political revolutions, so in paradigm choice—there is no standard higher than the assent of the relevant community. To discover how scientific revolutions are effected, we shall therefore have to examine not only the impact of nature and of logic, but also the techniques of persuasive argumentation effective within the quite special groups that constitute the community of scientists.”
—Thomas S. Kuhn (b. 1922)