Paul Krugman observes how life under a gold standard is not pleasant:
Anyway, one alleged fact I keep hearing is that recessions were short and shallow under the gold standard. I don’t know where that’s coming from, but it just ain’t so. The data aren’t as good for the pre-1933 era as they are now, but for what it’s worth they suggest that there were a number of nasty, prolonged slumps under the gold standard. In particular, the Panic of 1893 was associated with a double-dip recession that left industrial production depressed and unemployment high for more than 5 years. Here’s the estimated unemployment rate from Historical Statistics Millennial Edition:
That’s a pretty ugly, prolonged slump. Gold is no panacea.
It was these persistent high unemployment rates under the deflationary gold standard that led to William Jennings Bryan’s famous “Cross of Gold” Speech. I wonder why there’s apparently no William Jennings Bryan today – our unemployment is worse and will likely be as long or longer.