ABSTRACT
Determination of the basis for a national currency is one of the foremost attributes of national sovereignty. At irregular intervals over the past halfcentury, countries have been urged to link their currencies by more or less rigid formulae to a variety of commodity baskets, with contents varying from one (gold) to several dozen commodities, and even beyond to an index of prices of goods and services, with varying intermediate combinations. Usually the stated aim is to ensure stability of the real value of money or, what is not the same, to reduce uncertainty in the real value of money. These objectives are typically assumed to be sufficient unto themselves, but sometimes they are justified as reducing uncertainty for business and household decisions that involve allocation of resources over time, and thereby contributing to national well-being.
