Sterling's Past, Dollar's Future: Historical Perspectives on Reserve Currency Competition

32 Pages Posted: 15 Jun 2005  

Barry Eichengreen

University of California, Berkeley; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Date Written: May 2005

Abstract

This paper provides an historical perspective on reserve currency competition and on the prospects of the dollar as an international currency. It questions the conventional wisdom that competition for reserve-currency status is a winner-take-all game, showing that several currencies have often shared this role in the past and arguing that innovations in financial markets make it even more likely that they will do so in the future. It suggests that the dollar and the euro are likely to share this position for the foreseeable future. Hopes that the yuan could become a major international currency 20 or even 40 years from now are highly premature.

Suggested Citation

Eichengreen, Barry, Sterling's Past, Dollar's Future: Historical Perspectives on Reserve Currency Competition (May 2005). NBER Working Paper No. w11336. Available at SSRN: https://ssrn.com/abstract=723305

Barry Eichengreen (Contact Author)

University of California, Berkeley ( email )

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National Bureau of Economic Research (NBER)

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Centre for Economic Policy Research (CEPR)

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