A New Model of the Gold Standard.

This paper presents a new model of the gold standard that enables the authors to disentangle the different monetary functions of gold. It builds in the sensible condition that the 'easiest' gold will be mined first and takes seriously the constraint implied by the irreversibility of gold mining. This constraint generates important asymmetries between the effects of rises and falls in exogenous variables. The authors' model also handles gold and the demand for it at an explicit primitive level and, thus, enables them to carry out a wide range of interesting conceptual experiments.