Keynes was Opposed to the Pre-World War I Gold Standard, Because its Rigid Exchange Rate System was Disruptive of Internal Price Stability and Facilitated the International Transmission of Economic Fluctuations through Changes in National Price Levels.

John Maynard Keynes' opposition to the gold standard may be further evidenced by his aversion to a system of fixed exchange rates, such as was provided by that monetary standard, and his preference, instead, for a system of flexible exchange rates. He objected to a fixed exchange rate system, because it could be obtained only at the expense of a stable internal price level. Keynes felt that the proper object of monetary policy is not to maintain the fixity of a particular exchange value. Keynes wanted to foresake the gold standard in favor of flexible exchange rates and stable internal prices. In place of the system of fixed exchange rates, as provided by the gold standard, Keynes favored a mechanism of fluctuating exchange rates such as emerged in the absence of the gold standard in the immediate post-war period. Keynes feels that the stability of prices is of greater domestic benefit.