Bimetallism

In economics, bimetallism is a monetary standard in which the value of the monetary unit is defined as equivalent both to a certain quantity of gold and to a certain quantity of silver; such a system establishes a fixed rate of exchange between the two metals. Some authors, such as Angela Redish or Charles Kindleberger have argued that bimetallism was, by construction, unstable. Changes in gold-silver exchange were, in their eyes, leading to massive changes in the money supply. Bimetallism was thus inherently flawed and the advent of the gold standard was inevitable. This view has been challenged by Friedman and Flandreau who wrote that the option to pay in gold or in silver had in fact a stabilizing effect.