Please, No Return to the Gold Standard!

There are news reports about the Republicans forming a study group to look into a return to the gold standard.  I hope this dies quickly since I don't think it is a good idea.  The gold standard never worked as the textbook model of it indicates, and the economies of the world were not more stable under the gold standard.  There is also ample evidence that the gold standard caused considerable harm. The most telling of these is the work by Eichengreen and others that showed that the countries with the deepest and longest-lasting depressions during the 30s were the ones that stayed on the gold standard the longest.  Another example we can draw from is the current euro zone.  As far as the euro zone goes, the euro is a single currency. The effects are the same as if you had numerous currencies with exchange rates that were both fixed and unchangeable.  A gold standard is an example. The problems of the euro zone are due, at least in part, to the fact that the value of the euro is too high for the southern nations and lower than it should be for Germany and a couple of other countries.  Any stablization among the countries that make up the zone is hindered by the common currency. 

The gold standard is one of the few areas where I think Keynes was right--it is a relic from days gone by and we should not go back to it.  In fact, Keynes and Milton Friedman both argued against the gold standard, although for different reasons.  I hope the Republicans don't go down this path.