Buiter, Willem H. - C.E.P.R. Discussion Papers - 1986
The paper studies an idealized gold standard in a two-country setting. Unless national policies for domestic credit … standard collapses with certainty in finite time through a speculative selling attack against one of the currencies. Various … respond to these shocks, the public debt is likely to rise (or fall) to unsustainable levels. The idealized gold standard …