Working Paper
Can government gold be put to better use?: Qualitative and quantitative policies
Irons, John S.; Henderson, Dale W.; Salant, Stephen W.; Thomas, Sebastian (1997)
Gold has both private uses (depletion uses and service uses) and government uses. It can be obtained from mines with high extraction costs (about $300 per ounce) or from above ground stocks with no extraction costs. Governments still store massive stocks of gold. Making government gold available for private uses through some combination of sales and loans raises welfare from private uses by removing two types of inefficiencies. For given private uses, there is a production inefficiency if costless government gold is withheld while costly gold is taken from mines. There are use inefficiencies ...
International Finance Discussion Papers , Paper 582