Historically, money was made of either valuable commodities such as gold or silver coins or pieces of paper (bills) representing these commodities. The United States severed its last official monetary link to gold in 1971. The January 2015 Page One Economics Newsletter describes some of the advantages and disadvantages of the gold standard.
Student Edition (pdf)
Student Edition (html)
Thursday, August 14, 2014
Some argue that a return to the gold standard would guarantee price-level stability. However, the past 30 years of low and stable inflation in the U.S. have demonstrated that the gold standard is not necessary for price stability.
