Analysis of information sources in references of the Wikipedia article "Price–specie flow mechanism" in English language version.
How the Gold Standard Worked:
In theory, international settlement in gold meant that the international monetary system based on the Gold Standard was self-correcting.
... although in practice it was more complex. ... The main tool was the discount rate (...) which would in turn influence market interest rates. A rise in interest rates would speed up the adjustment process through two channels. First, it would make borrowing more expensive, reducing investment spending and domestic demand, which in turn would put downward pressure on domestic prices, ... Second, higher interest rates would attract money from abroad, ... The central bank could also directly affect the amount of money in circulation by buying or selling domestic assets ...
The use of such methods meant that any correction of an economic imbalance would be accelerated and normally it would not be necessary to wait for the point at which substantial quantities of gold needed to be transported from one country to another.
