Estonian kroon received real coverage with the reserves backing the kroon. The issue of treasury notes and exchange notes was terminated. In order to secure the credibility of the kroon, the Bank of Estonia exchanged kroon for foreign currency. All these measures restored confidence in the domestic banking and monetary sector, contributing to the economic reinvigoration of the country and to the improvement of the reputation of the Estonian state in the international arena. During the Great Depression in 1933, the kroon went off the gold standard, devalued 35% and obtained a currency peg with the Great Britain Pound (GBP) at 1
A Monetary History of the United States hands were tied. According to Eichengreen, in order to maintain the credibility of the gold standard, the Federal Reserve could not undertake actions (such as drastically increasing the money supply) in the manner advocated by Friedman and Schwartz. James Tobin, while appreciating the rigor with which Friedman and Schwartz demonstrated the importance of the monetary supply, questions their measures of the velocity of money and how informative this measure of the frequency of monetary transactions really is to understanding the macroeconomic fluctuations of the early-to-mid 20th century. A Monetary History of the United States A Monetary History of the United