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On The Welfare Benefits Of An International Currency

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  • Prakash Kannan

Abstract

depending on relative inflation rates. Of this gain, the benefits accruing to seignorage are on the order of 0.5% to 0.7%. The rest of the world is not indifferent as to which currency circulates as the dominant international currency. Conditional on their currency not being used internationally, their preference is for the dominant international currency to be the one with the lowest inflation rate.

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Bibliographic Info

Paper provided by Society for Economic Dynamics in its series 2007 Meeting Papers with number 29.

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Date of creation: 2007
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Handle: RePEc:red:sed007:29

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Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
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  1. Philippe Bacchetta & Eric van Wincoop, 2002. "A Theory of the Currency Denomination of International Trade," NBER Working Papers 9039, National Bureau of Economic Research, Inc.
  2. Dowd, Kevin & Greenaway, David, 1993. "Currency Competition, Network Externalities and Switching Costs: Towards an Alternative View of Optimum Currency Areas," Economic Journal, Royal Economic Society, vol. 103(420), pages 1180-89, September.
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  20. Prakash Kannan, 2007. "On The Welfare Benefits Of An International Currency," 2007 Meeting Papers 29, Society for Economic Dynamics.
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Cited by:
  1. Thimann, Christian, 2009. "Global roles of currencies," Working Paper Series 1031, European Central Bank.
  2. Stijn Claessens & M. Ayhan Kose, 2013. "Financial Crises: Explanations, Types and Implications," CAMA Working Papers 2013-06, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  3. Hyoung-kyu Chey, 2013. "The Concepts, Consequences, and Determinants of Currency Internationalization," GRIPS Discussion Papers 13-03, National Graduate Institute for Policy Studies.
  4. Prakash Kannan, 2007. "On The Welfare Benefits Of An International Currency," 2007 Meeting Papers 29, Society for Economic Dynamics.
  5. Zhang, Cathy, 2013. "An Information-Based Theory of International Currency," MPRA Paper 42114, University Library of Munich, Germany.

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