Tradeoffs between currency stability and other domestic economic objectives: Governments in the 1920s and 1930s faced conflictual pressures between maintaining currency stability and reducing unemployment. Suffrage, trade unions, and labor parties pressured governments to focus on reducing unemployment rather than maintaining currency stability. Increased risk of destabilizing capital flight: International finance doubted the credibility of national governments to maintain currency stability, which led to capital flight during crises, which aggravated the crises. The U.S., not Britain, was the main financial center''': Whereas Britain had during past periods been capable of managing a harmonious international monetary system, the U.S. was not. According to Douglas Irwin, the gold standard contributed to policymakers' turning to extreme protectionism in the 1930s. Policymakers were reluctant to abandon the gold standard, which would have allowed their currencies to depreciate. This instead led policymakers to impose higher tariffs and other protectionist measures.
Tradeoffs between currency stability and other domesti?c economic objectives: Governments in the 1920s and 1930s faced conflictual pressures between maintaining currency stability and reducing unemployment. Suffrage, trade unions, and labor parties pressured governments to focus on reducing unemployment rather than maintaining currency stability. Increased risk of destabilizing capital flight: International finance doubted the credibility of national governments to maintain currency stability, which led to capital flight during crises, which aggravated the crises. The U.S., not Britain, was the main financial center''': Whereas Britain had during past periods been capable of managing a harmonious international monetary system, the U.S. was not. According to Douglas Irwin, the gold s?tandard contributed to policymakers' turning to extreme protectionism in the 1930s. Policymakers were reluctant to abandon the gold standard, which would have allowed their currencies to depreciate. This instead led policymakers to impose higher tariffs and other protectionist measures.