International Currencies Past, Present and Future: Two Views from Economic History
28 Pages Posted: 30 Mar 2015
Date Written: October 21, 2014
This paper contrasts two views of international currency status: an “old view” in which network increasing returns are sufficiently strong that one currency dominates international markets at any point in time, versus a “new view” in which networks are open and several international currencies can coexist. It marshals historical evidence in favor of the “new view” and suggests that several national currencies, most plausibly the U.S. dollar and Chinese renminbi, are likely to share this international currency role in the not-too-distant future.
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