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Zombie International Currency: The Pound Sterling 1945-1973

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Abstract

This paper examines the international role of sterling during the Bretton Woods era and challenges the view of a competition between dollar and sterling after WWII. I construct a new dataset on the composition of foreign exchange reserves of European and sterling area monetary authorities. The postwar reserve role of sterling was limited to the sterling area and was artificial as this area was built as a captive market. I document the exchange controls, commercial threats and economic sanctions employed by the British authorities on sterling area countries to constrain them to keep their foreign exchange reserves in sterling.

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  • Maylis Avaro, 2020. "Zombie International Currency: The Pound Sterling 1945-1973," IHEID Working Papers 03-2020, Economics Section, The Graduate Institute of International Studies, revised 27 Apr 2021.
    • Handle: RePEc:gii:giihei:heidwp03-2020
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    2. Monnet, Eric & Puy, Damien, 2020. "Do old habits die hard? Central banks and the Bretton Woods gold puzzle," Journal of International Economics, Elsevier, vol. 127(C).

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    More about this item

    Keywords

    Monetary and financial history; Foreign exchnage; International monetary system;
    All these keywords.

    JEL classification:

    • N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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