Business Notes MONEY

Has James Baker become a goldbug? Not exactly, but the distinguished bankers and ministers from around the world who gathered in Washington last week for a meeting of the World Bank and International Monetary Fund were startled to hear the U.S. Treasury Secretary suggest a new role for gold in international economic affairs. To be sure, Baker was not advocating a return to the gold standard, in which the price of the precious metal would be fixed in all the major currencies. But the Secretary said countries might use an index of the worldwide prices of gold and other heavily traded commodities as a partial guide in coordinating economic policies. If that index was rising, for example, it would be a sign of inflationary pressures, and nations might decide jointly to raise interest rates to prevent rapid price increases.