The gold standard worsened the Great Depression by limiting central banks' ability to expand the money supply.

Is it true that the gold standard worsened the Great Depression by limiting central banks' ability to expand the money supply?

Yes. A reference overview states the gold standard limited central banks' ability to expand the money supply and that consensus holds it worsened the Depression's severity and length. Several peer-reviewed studies model the gold standard as a major determinant of the Depression and find the Fed was constrained by gold outflows, though one 1932 case study finds little evidence of constraint in that episode.

Verdict: SUPPORTED · 5 sources for, 1 against · Last checked 3 Oct 2026

The private library was unavailable for some searches in this check. Missing library results are not evidence against the claim.

Gold standard. (n.d.). en.wikipedia.org. https://en.wikipedia.org/wiki/Gold_standard

Was the Federal Reserve Constrained by the Gold Standard During the Great Depression? Evidence from the 1932 Open Market Purchase Program. (n.d.). cir.nii.ac.jp. https://doi.org/10.1017/s0022050706000064

The Gold Standard and the International Dimension of the Great Depression. (2023). hal.science. https://doi.org/10.2139/ssrn.4183413

The Great Depression and the Gold Standard -An expository example of Cliometrics-. (n.d.). cir.nii.ac.jp. https://cir.nii.ac.jp/crid/1050005822263172992

Exchange rate adjustment, monetary policy and fiscal stimulus in Japan's escape from the Great Depression. (n.d.). cir.nii.ac.jp. https://doi.org/10.1016/j.eeh.2014.02.002

Central banking under the gold standard: Rist versus Hawtrey on the policy of the Bank of France from 1928 to 1931. (2020). hal.science. https://doi.org/10.1080/09672567.2019.1651363