Bernanke's, and Liaquat's, and indeed all socialist monetarists', opinion is that rigid adherence to the gold standard "caused" the crash and depression of 1929-39 and beyond. But, as Bernanke and Liaquat admit, the central bankers of the post-war period in somes cases (France and the US quite openly and purposefully) "sterilized" their gold so that the money supply did not expand when needed but in fact contracted. So it was a failure to follow the gold standard rather than gold itself which was the culprit. Nor do either Bernanke nor Ahamed explain why the gold standard worked quite well for a century before WW1, although Bernanke admits that is an "unexplained" issue.
While acknowledging the long history of the gold standard and its importance in the development of central banking, Ben Bernanke made crystal clear that we're never going back to the gold standard.
He explained that the argument supporting the gold standard has two parts: 1) the "desire to maintain the value of the dollar"—implying a "desire to have very low price stability, and 2) an aversion to allowing "the central bank to respond with monetary policy to booms and busts," explaining that "the advocates of the gold standard don't want to give the central bank that power."
But regardless of the impetus for these arguments, he explains, a return to the gold standard now "would not be practical for monetary reasons or policy reasons":
Bernanke pointed out various reasons that there's simply "not enough gold" to sustain today's global economy. First, extracting gold from the ground is a costly and uncertain endeavor. There is a limited amount of gold in the world, and it just doesn't make sense in the modern world for central or commercial banks store large amounts of gold in vaults. The size of the gold supply and inconvenience of the metal renders it too impractical to keep up with the pace of global commerce.
Second, while advocates of the gold standard are right that prices remain stable in the long-term, "on a year to year basis, that's not true." Limited supplies of gold—or changes to the supply of gold—cause prices of goods to be volatile in the short-term, regardless of long-term price stability.
In a rebuttal to the second part of that argument, Bernanke explained, "the commitment to the gold standard is that no matter how bad [the economy gets] we're going to stick to the gold standard."
He pointed to a substantial tome of economic research finding that the gold standard aggravated the Great Depression, saying "the gold standard was one of the main reasons the Great Depression was so bad and so long." The inability of the Federal Reserve to control monetary policy—open up credit, address unemployment, and drive business demand—left it with much less power to avert or mitigate the decade-long crisis. Bernanke added that countries not tied to the gold standard also had a much easier time getting out of the Depression. In the modern world, he said, "we've seen that problem with various kinds of fixed exchange rates."
Ultimately, he concluded that the gold standard hasn't really worked since the end of WWI. "Economic historians argue that after World War I the labor movements became much stronger," so we consequently saw, "much more attention to employment and business cycles." That prevents our economies from suffering exaggerated boom and bust cycles, and allowed the Fed to mitigate the effects of the recent financial crisis.

ROMER C THE NATION IN DEPRESSION
Point: Despite the great depression period involved many countries in all the world, USA depression had peculiar aspects:
Peculiar aspects of American depression in general
1) An early downturn in the construction sector in the USA that was not in common with Germany, France and UK. For these countries the first year war just a “bad year” but not a tragic year. The depression was “great in the USA than elsewhere.
2) US: the fall in industrial production was mainly concentrated in consumer goods more than investment goods than in other countries.
3) USA (and Poland) Suffered the heaviest peak to trough fall in industrial production (-62.3%)
4) US had an unusual strength in the fall and recovery process and it started from investment goods (+42%)
5) To sum up the US was among the first countries to slip into depression and the last to recover

Causes of American depression domestic peculiar factors are very important
- In the 20’s and 30’s wages and prices were not completely flexible, this implies that movements in aggregate demand had real effects. Short term effects were mainly due to the crash in the financial market and collapse in domestic consumption spending, long term to tight monetary policy.
- In 1929 interest rates were quite high because the FED was trying to stem stock market boom. This policy wasn’t very effective because there were expectations of higher returns in the stock market. After the crash in Oct 1929, the FED lowered the interest rates so the monetary authority was responsive to the collapse. On this point Romer writes “the most likely source of precipitous drop in American consumption following the stock market crash in 1929 is tge crash itself” p30
- The crash made investors pessimistic about the future and the environment much more uncertain. Consumers cut their spending on irreversible durable goods, grocery store sales and ten-cent store sales rose !
- The crash triggered banking panics and worsened the depression. Bank panics cause a fall in money supply (reduction of borrowings), increased interest rates. Moreover it enhances pessimism and reduces again consumption. When a bank fails, all the long term relationships and informations are lost. This loss of information causes agency costs to rise and the result is credit rationing that makes (especially for small investors) investments more difficult.
- Also American policy ineffectiveness in 1930 1931 played a crucial role. The FED inaction was mainly due to gold standard constraints (and not to fear or deadlock and indecision in the Board of Governors as Friedman and Shwartz assume).

Sources of American recovery
- In 1932 the FED started an expansionary monetary policy,
- Was the recovery fast or slow
This paper examines the American Great Depression and the ways in which the U.S. experience during the 1930s resembled that of other countries in some regards and fundamentally differed in other aspects. I also evaluate the evidence on the causes of the Great Depression in the United States and the sources of the eventual recovery. The picture painted of the American Great Depression is one that stresses the importance of national, rather than international, aggregate demand shocks. The experience of the United States during the 1930s differed in important ways from that of other countries because the American experience had many uniquely American roots.