The gold standard was the monetary system in place before its collapse. Under this system, paper money was backed by gold reserves. This meant that each unit of currency could be converted into a specific amount of gold. The gold standard ensured price stability and limited inflation. However, it also made economic recessions more severe, as countries were unable to use monetary policy to stimulate their economies. The gold standard ended during the Great Depression when most countries abandoned it in favor of fiat currencies. Today, no country uses the gold standard.