Empirics of International Currencies: Network Externalities, History and Persistence
Using a new database for the late nineteenth century, when the pound sterling was the world's leading international currency, this article provides evidence on the empirical determinants of international currency status. We report evidence in favour of the search-theoretic models to internation...
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| Published in | The Economic journal (London) Vol. 119; no. 537; pp. 643 - 664 |
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| Main Authors | , |
| Format | Journal Article |
| Language | English |
| Published |
Oxford, UK
Oxford, UK : Blackwell Publishing Ltd
01.04.2009
Blackwell Publishing Ltd Blackwell Publishing Oxford University Press |
| Subjects | |
| Online Access | Get full text |
| ISSN | 0013-0133 1468-0297 |
| DOI | 10.1111/j.1468-0297.2009.02219.x |
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| Summary: | Using a new database for the late nineteenth century, when the pound sterling was the world's leading international currency, this article provides evidence on the empirical determinants of international currency status. We report evidence in favour of the search-theoretic models to international currencies. Using a microeconomic model of currency choice, we provide empirical support to strategic externalities. We find strong confirmation of the existence of persistence, but reject the view that the international monetary system was subject to pure path dependency and lock-in effects, suggesting that, even in the absence of WWI, the USD was bound to overtake sterling. |
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| Bibliography: | http://dx.doi.org/10.1111/j.1468-0297.2009.02219.x ark:/67375/WNG-11TG70NS-R ArticleID:ECOJ2219 istex:C23D1890C07C45DCBDCF3863D9AF6C779ABE5103 The authors gratefully acknowledge financial support from the Foundation Banque de France. Flandreau thanks the IMF for its hospitality while writing part of this article (April 2005) and the BIS for having provided much precision on its Triennial Survey. Earlier versions of this article were presented at the Cliometric Conference, Lake Tahoe, June 2005; Stanford University, June 2005; the European Economic History Conference, Istanbul, September 2005; the EHA meetings, Toronto, September 2005; the Paris X-Nanterre macroeconomics seminar, October 2005; the Bank of International Settlement seminar, November 2005; the Graduate Institute workshop on 'Capital market integration' in Geneva, December 2005; and the ASSA meetings in Boston, January 2006. We thank the editor of this Journal as well as two referees for suggestions and criticism. We are also grateful for discussions with colleagues and for comments from seminar participants. We specially thank Michel Aglietta, Vincent Bignon, Mike Bordo, Claudio Borio, Lee Craig, Barry Eichengreen, Andrew Filardo, Price Fishback, Stefan Gerlach, Charles Goodhart, Avner Greif, Philip Hartmann, Paolo Mauro, Kris Mitchener, Frank Packer, Yung Chul Park, Peter Rousseau, Isabel Schnabel, Hui Tong, Gavin Wright and Charles Wyplosz. The views stated herein are those of the authors and are not necessarily those of the Oesterreichische Nationalbank. Responsibility for misinterpretations remains ours. Earlier versions of this article were presented at the Cliometric Conference, Lake Tahoe, June 2005; Stanford University, June 2005; the European Economic History Conference, Istanbul, September 2005; the EHA meetings, Toronto, September 2005; the Paris X‐Nanterre macroeconomics seminar, October 2005; the Bank of International Settlement seminar, November 2005; the Graduate Institute workshop on ‘Capital market integration’ in Geneva, December 2005; and the ASSA meetings in Boston, January 2006. We thank the editor of this The authors gratefully acknowledge financial support from the Foundation Banque de France. Flandreau thanks the IMF for its hospitality while writing part of this article (April 2005) and the BIS for having provided much precision on its Triennial Survey Journal as well as two referees for suggestions and criticism. We are also grateful for discussions with colleagues and for comments from seminar participants. We specially thank Michel Aglietta, Vincent Bignon, Mike Bordo, Claudio Borio, Lee Craig, Barry Eichengreen, Andrew Filardo, Price Fishback, Stefan Gerlach, Charles Goodhart, Avner Greif, Philip Hartmann, Paolo Mauro, Kris Mitchener, Frank Packer, Yung Chul Park, Peter Rousseau, Isabel Schnabel, Hui Tong, Gavin Wright and Charles Wyplosz. The views stated herein are those of the authors and are not necessarily those of the Oesterreichische Nationalbank. Responsibility for misinterpretations remains ours. SourceType-Scholarly Journals-1 ObjectType-Feature-1 content type line 14 ObjectType-Article-2 content type line 23 ObjectType-Article-1 ObjectType-Feature-2 |
| ISSN: | 0013-0133 1468-0297 |
| DOI: | 10.1111/j.1468-0297.2009.02219.x |