The Concepts, Consequences, and Determinants of Currency Internationalization
The international statuses of currencies shape a fundamental characteristic of the international monetary system, which has significant impacts on the world political economy by affecting the political as well as economic relationships among states. The study of international currencies has been long dominated largely by economists, however, with political economy research in this area quite underdeveloped. However, the 2008/9 global financial crisis, the subsequent European debt crisis and the recent active Chinese promotion of renminbi internationalization have spurred new and considerable interest among political economists on issues surrounding international currencies. Political economy study of international currencies has thus been gradually growing of late, and making notable progress. This study provides a comprehensive and systematic review of the literature on international currencies—covering both political economy and economics—with the primary aim of building a useful groundwork to help develop a better research framework for the political economy study of them. In particular, it discusses the international currency concept, the costs and benefits of international currency issuance, the determinants of currency internationalization, and the future prospects of the current dollar-centered international monetary system. This research in addition highlights a group of important issues that need further investigation by future political economy study of international currencies, by drawing special attention to the following issues: historical events, the political determinants of currency internationalization, government policy strategies, and the consequences of international currency choice.
|Date of creation:||May 2013|
|Date of revision:|
|Contact details of provider:|| Postal: 7-22-1 Roppongi, Minato-ku, Tokyo, Japan 106-8677|
Web page: http://www.grips.ac.jp/r-center/en/discussion_papers/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nienke Oomes & Christopher M. Meissner, 2008.
"Why Do Countries Peg the Way They Peg? The Determinants of Anchor Currency Choice,"
IMF Working Papers
08/132, International Monetary Fund.
- Meissner, Christopher M. & Oomes, Nienke, 2009. "Why do countries peg the way they peg? The determinants of anchor currency choice," Journal of International Money and Finance, Elsevier, vol. 28(3), pages 522-547, April.
- Christopher Meissner & Nienke Oomes, 2006. "Why Do Countries Peg the Way They Peg? The Determinants of Anchor Currency Choice," WEF Working Papers 0009, ESRC World Economy and Finance Research Programme, Birkbeck, University of London.
- Meissner, C.M. & Oomes, N., 2006. "Why Do Countries Peg the Way They Peg? The Determinants of Anchor Currency Choice," Cambridge Working Papers in Economics 0643, Faculty of Economics, University of Cambridge.
- Schenk,Catherine R., 2013.
"The Decline of Sterling,"
Cambridge University Press, number 9781107612990, June.
- Fratzscher, Marcel & Mehl, Arnaud, 2011.
"China’s Dominance Hypothesis and the Emergence of a Tri-polar Global Currency System,"
CEPR Discussion Papers
8671, C.E.P.R. Discussion Papers.
- Marcel Fratzscher & Arnaud Mehl, 2014. "China's Dominance Hypothesis and the Emergence of a Tri‐polar Global Currency System," Economic Journal, Royal Economic Society, vol. 124(581), pages 1343-1370, December.
- Fratzscher, Marcel & Mehl, Arnaud, 2011. "China's dominance hypothesis and the emergence of a tri-polar global currency system," Working Paper Series 1392, European Central Bank.
- Giovanni Pittaluga & Elena Seghezza, 2012. "Euro vs Dollar: An Improbable Threat," Open Economies Review, Springer, vol. 23(1), pages 89-108, February.
- Goldberg, Linda S. & Tille, Cédric, 2008.
"Vehicle currency use in international trade,"
Journal of International Economics,
Elsevier, vol. 76(2), pages 177-192, December.
- Marc Flandreau & Clemens Jobst, 2009. "The Empirics of International Currencies: Network Externalities, History and Persistence," Economic Journal, Royal Economic Society, vol. 119(537), pages 643-664, 04.
- Kannan, Prakash, 2009.
"On the welfare benefits of an international currency,"
European Economic Review,
Elsevier, vol. 53(5), pages 588-606, July.
- Prakash Kannan, 2007. "On The Welfare Benefits Of An International Currency," 2007 Meeting Papers 29, Society for Economic Dynamics.
- Prakash Kannan, 2007. "On The Welfare Benefits of an International Currency," IMF Working Papers 07/49, International Monetary Fund.
- Thimann, Christian, 2009.
"Global roles of currencies,"
Working Paper Series
1031, European Central Bank.
- Habib, Maurizio Michael & Joy, Mark, 2008.
"Foreign-currency bonds: currency choice and the role of uncovered and covered interest parity,"
Working Paper Series
0947, European Central Bank.
- Maurizio Michael Habib & Mark Joy, 2010. "Foreign-currency bonds: currency choice and the role of uncovered and covered interest parity," Applied Financial Economics, Taylor & Francis Journals, vol. 20(8), pages 601-626.
- Cooper, Richard N., 2010. "Does the SDR Have a Future?," Scholarly Articles 13578516, Harvard University Department of Economics.
- Michele Fratianni, 2012. "The Future International Monetary System: Dominant Currencies or Supranational Money? An Introduction," Open Economies Review, Springer, vol. 23(1), pages 1-12, February.
- Hallerberg, Mark, 2002. "Veto Players and the Choice of Monetary Institutions," International Organization, Cambridge University Press, vol. 56(04), pages 775-802, September.
- Benjamin H Cohen, 2005. "Currency choice in international bond issuance," BIS Quarterly Review, Bank for International Settlements, June.
- Dong He & Robert N. McCauley, 2010.
"Offshore Markets for the Domestic Currency: Monetary and Financial Stability Issues,"
1002, Hong Kong Monetary Authority.
- Dong He & Robert McCauley, 2010. "Offshore markets for the domestic currency: monetary and financial stability issues," BIS Working Papers 320, Bank for International Settlements.
- Frieden, Jeffry A., 1991. "Invested interests: the politics of national economic policies in a world of global finance," International Organization, Cambridge University Press, vol. 45(04), pages 425-451, September.
- Friedrich Wu & Rongfang Pan & Di Wang, 2010. "Renminbi's Potential to Become a Global Currency," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 18(1), pages 63-81.
- Benjamin J. Cohen, 2009. "Dollar Dominance, Euro Aspirations: Recipe for Discord?," Journal of Common Market Studies, Wiley Blackwell, vol. 47, pages 741-766, 09.
- Menzie D. Chinn & Jeffrey A. Frankel, 2008.
"The Euro May Over the Next 15 Years Surpass the Dollar as Leading International Currency,"
NBER Working Papers
13909, National Bureau of Economic Research, Inc.
- Chinn, Menzie & Frankel, Jeffrey, 2008. "The Euro May over the Next 15 Years Surpass the Dollar as Leading International Currency," Working Paper Series rwp08-016, Harvard University, John F. Kennedy School of Government.
- Wendy Dobson & Paul R. Masson, 2007.
"Will the Renminbi Become a World Currency?,"
Working Papers Series
10, Rotman Institute for International Business, Joseph L. Rotman School of Management, University of Toronto, revised Dec 2007.
- Bernhard, William & Leblang, David, 1999. "Democratic Institutions and Exchange-rate Commitments," International Organization, Cambridge University Press, vol. 53(01), pages 71-97, December.
- Peter B. Kenen, 2010. "Reforming the Global Reserve Regime: The Role of a Substitution Account," International Finance, Wiley Blackwell, vol. 13(1), pages 1-23, 03.
- Adam S. Posen, 2008. "Why the Euro will Not Rival the Dollar," International Finance, Wiley Blackwell, vol. 11(1), pages 75-100, 05.
- Cooper Richard N, 2010. "Does the SDR Have a Future?," Journal of Globalization and Development, De Gruyter, vol. 1(2), pages 1-9, December.
- Chey Hyoung kyu, 2012. "Why Did the US Federal Reserve Unprecedentedly Offer Swap Lines to Emerging Market Economies during the Global Financial Crisis? Can We Expect Them Again in the Future?," GRIPS Discussion Papers 11-18, National Graduate Institute for Policy Studies.
- Kenen, Peter B., 2002. "The euro versus the dollar: will there be a struggle for dominance?," Journal of Policy Modeling, Elsevier, vol. 24(4), pages 347-354, July.
- Benjamin Cohen, 2012. "The Benefits and Costs of an International Currency: Getting the Calculus Right," Open Economies Review, Springer, vol. 23(1), pages 13-31, February.
- Yusuru Ozeki & George S. Tavlas, 1992. "The Internationalization of Currencies; An Appraisal of the Japanese Yen," IMF Occasional Papers 90, International Monetary Fund.
- Ewe-Ghee Lim, 2006. "The Euroâ€™s Challenge to the Dollar; Different Views from Economists and Evidence from COFER (Currency Composition of Foreign Exchange Reserves) and Other Data," IMF Working Papers 06/153, International Monetary Fund.
- Eric Helleiner & Anton Malkin, 2012. "Sectoral Interests and Global Money: Renminbi, Dollars and the Domestic Foundations of International Currency Policy," Open Economies Review, Springer, vol. 23(1), pages 33-55, February.
- Broz, J. Lawrence, 2002. "Political System Transparency and Monetary Commitment Regimes," International Organization, Cambridge University Press, vol. 56(04), pages 861-887, September.
- Tavlas, G.S., 1991. "On the International Use of Currencies: the Case of the Deutsche Mark," Princeton Studies in International Economics 181, International Economics Section, Departement of Economics Princeton University,.
- Ocampo José Antonio, 2010. "Building an SDR-Based Global Reserve System," Journal of Globalization and Development, De Gruyter, vol. 1(2), pages 1-15, December.
- Barry Eichengreen, 2005. "Sterling's Past, Dollar's Future: Historical Perspectives on Reserve Currency Competition," NBER Working Papers 11336, National Bureau of Economic Research, Inc.
- Michael P. Dooley & David Folkerts-Landau & Peter Garber, 2004. "The revived Bretton Woods system," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 9(4), pages 307-313.
- Chey Hyoung kyu, 2012. "Can the Renminbi Rise as a Global Currency? The Political Economy of Currency Internationalization," GRIPS Discussion Papers 11-20, National Graduate Institute for Policy Studies.
- Edwin M. Truman & Anna Wong, 2006. "The Case for an International Reserve Diversification Standard," Working Paper Series WP06-2, Peterson Institute for International Economics.
When requesting a correction, please mention this item's handle: RePEc:ngi:dpaper:13-03. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.