I'm a huge Milton Friedman fan. But the segment of his critique of fixed exchange rate regimes addressing the U.S. gold standard of 1879-1914 is not worthy of that great man.
https://twitter.com/BruceBartlett/status/1287761272923213825
"The period," Friedman writes, "saw ... deflation from 1879 to 1866 [sic], followed by inflation from 1896 to 1914, during which period there were repeated financial crises, many business fluctuations, a major depression in the 1890s, and a banking panic in 1907."
In the Monetary History of the United States, Friedman and Schwartz argue that the long-term decline in prices between 1873 and 1896 was not itself a cause of recession or depression--a fact that has since been affirmed by many other scholars. nber.org/system/files/w…
As for U.S. crises and panics, these weren't the fault of the gold standard: they were results of peculiar U.S. currency and banking arrangements. That's why Canada, despite using the same gold $, didn't have the same crises. alt-m.org/2015/07/29/the…
Finally, the post-1896 inflation--a result of the most impressive new gold discoveries ever--needs to be put in perspective. The average annual inflation rate for 1896-1914 was--hang on to your hats!--roughly 2%!
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