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Krytí peněz v současnosti mýty, varianty a realita
[Backing of Money at Present - Myths, Variants and Reality]

Author

Listed:
  • Zbyněk Revenda

Abstract

There are many myths associated with gold, especially its historical role. Notably the supporters of free banking criticise the current monetary system and consider present money unbacked. This does not correspond to the fact that the money is backed by the assets of the issuers. There are demands to return to full gold backing. The analysis of the share of gold in the monetary base and in the monetary aggregates M1 and M2 for the United States of America and the Czech Republic over the period 1993-2016 shows a complete shortage of gold. The results are in units or tenths of percent. The author discusses some other unsolved issues, primarily the high price volatility and the impossibility of unlimited convertibility. Attention is also paid to currency board systems with full foreign currency backing. With the hypothetical admission of full gold backing, restricting the money supply by the amount of gold would quickly and dramatically curtail the supply of credit, with subsequent impacts on economic growth. Requirements for full gold backing of present money are completely illusory.

Suggested Citation

  • Zbyněk Revenda, 2018. "Krytí peněz v současnosti mýty, varianty a realita [Backing of Money at Present - Myths, Variants and Reality]," Politická ekonomie, Prague University of Economics and Business, vol. 2018(5), pages 633-651.
  • Handle: RePEc:prg:jnlpol:v:2018:y:2018:i:5:id:1219:p:633-651
    DOI: 10.18267/j.polek.1219
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    References listed on IDEAS

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    1. Zbyněk Revenda, 2016. "Peněžní a úvěrové multiplikátory ve vybraných ekonomikách [Money and Credit Multipliers in Selected Economies]," Politická ekonomie, Prague University of Economics and Business, vol. 2016(5), pages 505-523.
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      More about this item

      Keywords

      bank reserves; central bank; currency board; commercial bank; free banking; gold; money; multiplier;
      All these keywords.

      JEL classification:

      • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
      • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
      • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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