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How did leaving the gold standard help countries recover from the Great Depression?

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A long line of unemployed men in coats and hats stands outside a soup kitchen in Chicago, with a storefront sign reading Free Soup, Coffee and Doughnuts for the Unemployed. — Great Depression Unemployed men standing in line outside a soup kitchen, Chicago.

Leaving the gold standard was a critical factor in global recovery from the Great Depression because it liberated countries from the constraints of a rigid monetary system that forced deflation and economic contraction.123

Under the gold standard, nations were required to defend fixed currency values by maintaining gold reserves, which often necessitated raising interest rates and reducing the money supply during economic downturns. This process, intended to prevent gold outflows, inadvertently deepened the depression by depressing output, prices, and employment.243

By abandoning the gold standard or devaluing their currencies, countries gained the freedom to:

Expand the money supply: Central banks could increase the money supply without the fear of depleting gold reserves or violating exchange rate commitments.3
Stimulate economic activity: Monetary expansion lowered interest rates and increased the availability of credit, which encouraged business investment and consumer spending.3
Foster confidence: By moving away from deflationary policies, governments signaled a shift toward growth, giving borrowers greater confidence that future wages and profits would be sufficient to cover loan payments.3

Countries that abandoned the gold standard early, such as Britain in 1931, generally experienced an earlier recovery compared to those that remained committed to it, such as the "Gold Bloc" nations.43