An Assessment of the Causes of the Abandonment of the Gold Standard by the U.S. in 1933

In this paper we present an investigation of the pressures on the United States to devalue the dollar against the franc and gold in the early 1930s. We calculate monthly time-series of realignment expectations and find that these are well explained by a set of fundamental economic variables. The implication is drawn that macroeconomic events were at least in part responsible for jolting the U.S. off the gold standard and that the Federal Reserve was constrained in its response to the Depression by the United States' commitment to gold.