ABSTRACT
This chapter describes the international monetary experience under the pre-1914 gold standard until the end of the gold-exchange standard. The gold standard emerged in the latter part of the nineteenth century and was widely used until the outbreak of World War I. When a country went on the gold standard, its currency was defined in terms of gold and the central bank was required to buy and sell gold at a set price. As long as the public believed the central banks would adhere to the gold standard, the exchange rate was stable, its range of possible movement being determined by the transportation costs for gold.
