International Money and Common Currencies in Historical Perspective
AbstractWe review the history of international monies and the theory related to their adoption and use. There are four key characteristics of these currencies: high unitary value; relatively low inflation rates for long periods; issuance by major economic and trading powers; and spontaneous, as opposed to planned, adoption internationally. The economic theory of the demand for money provides support for the importance of these characteristics. The value of a unit is arbitrary for a fiat money, but the other characteristics are likely to be important for determining any fiat money that will be the international money in the future. If the euro continues to exist for the next half century or so and has a relatively stable value, we conclude that the euro is likely to be serious competition for the dollar as the international money.
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Bibliographic InfoPaper provided by EconWPA in its series International Finance with number 0311005.
Length: 26 pages
Date of creation: 12 Nov 2003
Date of revision:
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Monetary history; international money; monetary institutions.;
Other versions of this item:
- Gerald P. Dwyer, Jr. & James R. Lothian, 2002. "International money and common currencies in historical perspective," Working Paper 2002-7, Federal Reserve Bank of Atlanta.
- Gerald P. Dwyer & James R. Lothian, 2003. "International Money and Common Currencies in Historical Perspective," CEIS Research Paper 9, Tor Vergata University, CEIS.
- E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
- N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-11-16 (All new papers)
- NEP-CBA-2003-11-16 (Central Banking)
- NEP-MON-2003-11-16 (Monetary Economics)
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