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The Gibson paradox: real gold, interest rates and prices

Abdullah, Adam (2013) The Gibson paradox: real gold, interest rates and prices. International Business Research, 6 (4). pp. 32-44. ISSN 1913-9004

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Abstract

This paper aims to provide an analysis and explanation of the curious empirical relationships that exist between the price of gold, the interest rate and commodity prices, operating under the English 19th century fractional reserve gold standard and the modern American fractional reserve fiat paper standard, known as the Gibson Paradox. This paper argues that the value and purchasing power of the British pound and American dollar are managed in relation to their rate of exchange with gold and the real rate of interest, such that, changes in the general level of prices are the effect and not the cause.

Item Type: Article (Journal)
Additional Information: 7452/44659
Uncontrolled Keywords: Gibson paradox, gold standard, purchasing power of gold, real interest rate
Subjects: H Social Sciences > HB Economic Theory
Kulliyyahs/Centres/Divisions/Institutes: Institute of Islamic Banking & Finance (IIiBF)
Depositing User: Dr Adam Abdullah
Date Deposited: 14 Sep 2015 09:49
Last Modified: 14 Sep 2015 09:49
URI: http://irep.iium.edu.my/id/eprint/44659

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