BPEA | 1982 No. 1

The Gold Standard: Historical Facts and Future Prospects

discussants: Robert E. Hall and
Robert Hall Headshot
Robert E. Hall Robert and Carole McNeil Joint Hoover Senior Fellow and Professor of Economics - Stanford University
Rudiger Dornbusch

1982, No. 1

GOLD is a hardy perennial. It provides a psychological and material safe
haven for people all around the world, and its invocation still produces
deep-seated visceral reactions in many. It is not surprising, then, that
when economic conditions are unfavorable, proposals to strengthen the
role of gold in the monetary system find an audience much wider than
the “gold bugs” who have always seen the demise of the gold standard
as the negative turning point in Western civilization.
The early 1980s is one of these periods. A number of proposals have
been put forward to reinstitute some monetary role for gold, varying
from window dressing to a full-fledged revival of the gold standard.
These proposals are being treated with a seriousness that would have
been astonishing twenty, ten, or even five years ago. An official examination
of the subject was undertaken by the Gold Commission, which
was established by President Reagan in June 1981 and issued its contentious
report in March 1982; and several bills have been submitted to
Congress with the objective of reviving a monetary role for gold.