The United States emerged from World War I stronger than ever. The main combatants—France, Germany, and Britain—returned much weaker. The European states sought a return to the gold standard as a way to restore the prosperity of the old era. There were just two issues about how to do this. First was whether to reestablish parity at pre-war levels, which would require significant austerity to get domestic prices down to where they needed to be, or to aim for new lower parities that would better reflect the actual conditions of these war-battered economies. The second issue was intimately related: how to cope with demands from these newly democratized populations for compensatory policies that would make this adjustment all the more difficult. These countries, and several more, opted for the hard road, and it would take years of grinding austerity to get them back on gold. Germany returned to gold in 1924, Britain in 1925, and France in 1926. Once they got there, as we shall see, things only got worse.

Mark Blyth, Austerity, loc. 499