Economists pan idea of new U.S. gold standard
WASHINGTON — As Republican presidential hopefuls entertain calls to fix the value of the dollar to the price of gold, a panel of leading economists on Wednesday roundly panned the idea of a return to the gold standard.
A poll of nearly 40 bipartisan economists showed no support for the idea that pegging the currency to the price of gold would lead to a more stable US jobs market or keep prices in check.
Asked by University of Chicago whether a return to the gold standard would lead to price-stability and employment outcomes that “would be better for the average American,” 100 percent of respondents said no.
Republican candidate Ron Paul has long advocated a return to the gold standard — which was abandoned by the United States in 1971 and decades before by the rest of the world — but his competitors have also warmed to the idea.
Campaigning in South Carolina on Tuesday Newt Gingrich called for a “gold commission” to look at how to get back to “hard money,” according to CNN.
Even that less than full-throated support was not shared by poll respondents.
“A gold standard regime would be a disaster for any large advanced economy. Love of the (gold standard) implies macroeconomic illiteracy,” said Chicago Booth’s Anil Kashyap.
“Eesh. Has it come to this?” responded Austan Goolsbee, former top economist to Barack Obama and now a Chicago professor, expressing his strong disagreement.
Other objections were more specific.
“Since gold has supply and demand dynamics of its own, for reasons unrelated to its use as a store of value, Americans would exposed to risk,” said Caroline Hoxby of Stanford University.