IDEAS home Printed from https://ideas.repec.org/a/ers/journl/vxxiiiy2020i1p31-40.html
   My bibliography  Save this article

Global Instability of Gold Prices: View from the State-corporation Hegemonic Stability Theory

Author

Listed:
  • Dariusz Eligiusz Staszczak Ph.D.

Abstract

Purpose: The purpose of this paper is an explanation of reasons of gold prices instability after the establishment of the free gold market in 1968-1974. Subject of the analysis, i.e. the gold has been chosen because of its big strategic importance as a reserve metal for states and business over the world. Therefore, prices of the gold are connected with the global political-economic situation. Design/Methodology/Approach: The design is a new application of the theory of the state-corporation hegemonic stability, i.e. a new contemporary theory of international political economy. The research method is a describing political-economic analysis based on statistical data. Author analyses the gold prices in particular time periods and according to the state-corporation hegemonic stability theory. Findings: According to presented point of view, fiat money in circulation and a lack of fixed gold exchange standard in connection with a relatively stable global political-economic situation are the most important reasons of unstable and relatively low market prices of the gold in long time periods. However, disturbances of the world system cause fast and relatively big growths of gold prices in short time periods. Therefore, the global instability of gold prices is a phenomenon of the contemporary world. A destruction of the global system or world war in the future can cause a big increase of gold prices. Moreover, in the longer run, a further growth of prices of the gold will be probably unavoidable because of inflation in spite of periods of their drops. A fiat money system without any established gold parity adds monetary advantages for the contemporary global market economy, i.e. opportunities to increase money supplies in spite of a lack of gold reserves. Therefore, according the state-corporation hegemonic stability theory, state-powers and biggest transnational corporations are not interested to change the fiat money standard into the gold money standard. Practical Implications: The result can be considered for short-term and long-term investments in gold. Originality/Value: Original research based on the new theory.

Suggested Citation

  • Dariusz Eligiusz Staszczak Ph.D., 2020. "Global Instability of Gold Prices: View from the State-corporation Hegemonic Stability Theory," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 31-40.
    • Handle: RePEc:ers:journl:v:xxiii:y:2020:i:1:p:31-40
    as

    Download full text from publisher

    File URL: https://www.ersj.eu/journal/1533/download
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Dariusz Eligiusz Staszczak, 2015. "Global instability of currencies: reasons and perspectives according to the State-corporation hegemonic stability theory," Brazilian Journal of Political Economy, Center of Political Economy, vol. 35(1), pages 175-198.
    2. Andrea Terzi, 2005. "International Financial Instability in a World of Currencies Hierarchy," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0064, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sandro Brusco & Luca Colombo & Umberto Galmarini, 2010. "Local Governments Tax Autonomy, Lobbying, and Welfare," Department of Economics Working Papers 10-01, Stony Brook University, Department of Economics.
    2. Luca Colombo & Herbert Dawid & Kordian Kabus, 2012. "When do thick venture capital markets foster innovation? An evolutionary analysis," Journal of Evolutionary Economics, Springer, vol. 22(1), pages 79-108, January.
    3. Giuseppe Mastromatteo, 2011. "H.P. Minsky And Policies To Countervail Crises," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0102, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    4. Dariusz Eligiusz Staszczak, 2021. "Fall of the Global Gold Exchange Standard and the Formation of the Contemporary Free Gold Market," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 1), pages 341-347.
    5. Paweł Kowalewski & Dominik Skopiec, 2023. "Wzrost znaczenia złota w rezerwach dewizowych banków centralnych gospodarek wschodzących," Bank i Kredyt, Narodowy Bank Polski, vol. 54(3), pages 259-284.
    6. Jorg Bibow, 2019. "Evolving International Monetary and Financial Architecture and the Development Challenge: A Liquidity Preference Theoretical Perspective," Economics Working Paper Archive wp_935, Levy Economics Institute.
    7. Giuseppe Mastromatteo, 2011. "The Debate on the Crisis: Recent Reappraisals of the Concept of Functional Finance," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0105, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    8. Annina Kaltenbrunner, 2018. "Financialised internationalisation and structural hierarchies: a mixed-method study of exchange rate determination in emerging economies," Cambridge Journal of Economics, Oxford University Press, vol. 42(5), pages 1315-1341.
    9. Annina Kaltenbrunner, 2015. "A post Keynesian framework of exchange rate determination: a Minskyan approach," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 38(3), pages 426-448, October.
    10. Bonpasse, Morrison, 2007. "The Single Global Currency - Common Cents for the World (2007 Edition)," MPRA Paper 5879, University Library of Munich, Germany.
    11. Maria Flavia Ambrosanio & Massimo Bordignon & Floriana Cerniglia, 2010. "Constitutional Reforms, Fiscal Decentralization and Regional Fiscal Flows in Italy," Chapters, in: Núria Bosch & Marta Espasa & Albert Solé Ollé (ed.), The Political Economy of Inter-Regional Fiscal Flows, chapter 4, Edward Elgar Publishing.
    12. Angelo Baglioni, 2006. "Entry into a network industry: consumers’ expectations and firms’ pricing policies," DISCE - Quaderni dell'Istituto di Economia e Finanza ief69, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    13. Baglioni, Angelo & Monticini, Andrea, 2010. "The intraday interest rate under a liquidity crisis: The case of August 2007," Economics Letters, Elsevier, vol. 107(2), pages 198-200, May.
    14. Jörg Bibow, 2019. "Zur US Dollar Hegemonie: Ein Blick zurück - und in die Zukunft," FMM Working Paper 48-2019, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    15. Stefano Colombo, 2008. "Discriminatory prices, endogenous locations and the Prisoner Dilemma problem," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0079, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).

    More about this item

    Keywords

    Unstable gold prices; fiat money; the global system; the state-corporation hegemonic stability theory.;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E39 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ers:journl:v:xxiii:y:2020:i:1:p:31-40. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marios Agiomavritis (email available below). General contact details of provider: https://ersj.eu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.