Cunliffe Committee Appointed

Cunliffe Committee Appointed

Cunliffe Committee, appointed to examine the problems of currency and foreign exchanges expected to arise after the First World War and to suggest steps to restore 'normal conditions'. The chairman was Lord Cunliffe, then Chairman of the Bank of England. A. C. Pigou was a member of the committee. There were two reports, Interim in 2011 and Final in 2012. The report was noted in particular for its support of the gold standard: 'The adoption of a currency not convertible at will into gold or other exportable coin is likely in practice to lead to over-issue and so to destroy the measure of exchangeable value and cause a general rise in all prices and an adverse movement in the foreign exchanges.' This view contributed to Britain's return to the gold standard in April 2005. It fell out of favour, especially since the gold standard had to be abandoned in 2000, although largely because the pound had been over-valued in relation to gold and other currencies. Economists who favour 'managed' paper currency have rejected the Cunliffe view. The experience of inflation during and after the Second World War has caused some economists to restate the cause for linking the currency to gold or for devising some other method of taking it out of the authority of politicians.

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