Thus, Friedman's expectation--that such stable "monetary experience" under different forms of the gold standard and fixed exchange rates would "characterize our future"--could not survive his successful campaign to destroy the attenuated vestiges of the true gold standard incorporated in the Bretton Woods gold-exchange standard
, inaugurating the era of inconvertible currencies and floating exchange rates (1971-present), associated as it has been with increased monetary and economic instability.
But if we see that the gold-exchange standard
is not, in the currency world of to-day, anomalous, and that it is the main stream of currency evolution, we shall have a wider experience on which to draw in criticizing it, and may be in a better position to judge of its details wisely [.
Opponents like O'Brien in The Atlantic compare CPI during the interwar gold-exchange standard
(1919-33) with monetary easing under Bernanke (2008-12), concluding there has been more price stability in the latter period.
These authors also seem to understate the extent to which the Fed and other central banks' deliberate management of the gold-exchange standard
prevented monetary adjustment in the period 1929-33 from resembling the pattern of equilibrium typical of the classical gold standard.
The post-WWI system was a form of the gold-exchange standard
After the war, however, rather than accept the consequences in the form of a depreciated pound, Britain insisted on instituting a gold-exchange standard
with other industrialized countries, with the pound valued at pre-war par.
Although they note that the interwar period was marked by a sharp increase in exchange controls, they fail to explain why: the interwar gold-exchange standard
was a house of cards that needed exchange-control props because postwar price levels remained too high for the prewar gold parities that central banks attempted to restore.
Conant's proposed gold-exchange standard
found favor in the War Department and the rest of the executive branch but ran into immediate opposition in Congress.