The Federal Reserve, the Bank of England and the rise of the dollar as an international currency, 1914-39
This paper provides new evidence on the rise of the dollar as an international currency, focusing on its role in the conduct of trade and the provision of trade credit. We show that the shift to the dollar occurred much earlier than conventionally supposed: during and immediately after World War I. Not just market forces but also policy support - the Fed in its role as market maker - was important for the dollar's overtaking of sterling as the leading international currency. On balance, this experience challenges the popular notion of international currency status as being determined mainly by market size. It suggests that the popular image of strongly increasing returns and pervasive network externalities leaving room for only one monetary technology is misleading.
|Date of creation:||Dec 2010|
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- Eichengreen, Barry & Flandreau, Marc, 2009.
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NBER Working Papers
13909, National Bureau of Economic Research, Inc.
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- Battilossi, Stefano, 2006.
"The determinants of multinational banking during the first globalisation 1880 1914,"
European Review of Economic History,
Cambridge University Press, vol. 10(03), pages 361-388, December.
- Stefano Battilossi, 2006. "The Determinants of Multinational Banking during the First Globalization, 1870–1914," Working Papers 114, Oesterreichische Nationalbank (Austrian Central Bank).
- Stefano Battilossi, 2005. "The Determinants of Multinational Banking during the First Globalization, 1870-1914," Working Papers in Economic History wh056807, Universidad Carlos III, Instituto Figuerola de Historia y Ciencias Sociales.
- Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-38, May.
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