Dual Currency System Research Articles

개항기 단일통화체제의 법제화와 이중통화의 운영

Existing currency research looked at the efforts and failure process to establish a single currency system based on the gold standard. Recent research is moving toward exploring the characteristics of monetary management, but still maintains the view that the establishment of a single currency system based on the gold standard is the basis of industrialization, and no research has been conducted on the characteristics of monetary management and the effect of the single currency system. Silver, which was outside the control of the state, was included in the state-managed currency system, thereby establishing a dual currency of white coins(白銅貨) and coins(葉錢). Although the volatility of high value-added currencies and inflation have deepened, the relative stability of the currency has led to the effect of blocking this volatility in the local market. At the same time, however, the multi-layered hierarchical structure of the trade market and the domestic regional market had a dual effect that contributed to capital expansion. The operation of a dual currency system through the legislation of a single currency has contributed to accelerating capitalization on the premise of a multi-layered hierarchical structure of value.

Valutna klauzula - ekonomsko-finansijske posledice

For years now, Serbia de facto lives in a dual currency system. Local currency is being used for most of the transactions with relatively small amounts. Alongside with that, local currency is being used as a formal means of payment for transaction accounted in Euros, i.e. with FX clause. FX clause is being used to express prices in real sector (goods, services, real estate, salaries, rents), but also for lending and repayment purposes in financial sector. FX clause, from theoretical perspective, would make sense as means of controlling the risk of FX rate movement in future, but only for agents with FX inputs, i.e. expenditures. However, mainly due to high inflation and hyperinflation heritage, FX clause is being used often and basically wrong, as an instrument to control risk of loss of purchasing power due to inflation. For this purpose it would be appropriate to use indexing for changes in Consumer Price Index, as a measure of inflation, and not indexing for changes in FX rate, i.e. FX clause. This because inflation and movement in FX rate do not have to be, and in most cases are not, perfectly correlated. Despite this, FX clause is widespread in use in both real and financial sectors. This paper is analyzing negative economic and financial consequences of widespread FX clause usage for an overall economic system of a country.

The "Real" Tragedy of the Commons: Can a Dual Currency System Achieve a Pareto-superior Equilibrium?

The "Real" Tragedy of the Commons: Can a Dual Currency System Achieve a Pareto-superior Equilibrium?

Entangled Economies: New Netherland's Dual Currency System and Its Relation to Iroquois Monetary Practice

The article aims at analyzing the monetary system of the Dutch colony New Netherland. It first carves out the formal structure of the colony's currency system and then goes on to show that the liberalization of New Netherland's economy exacerbated contradictions lurking inside the currency system and thereby fueled political conflicts among the West India Company, colonists, and Native Americans. By analyzing different strategies to deal with this situation, the article proposes that the contradictions could not be resolved, as their cause—economic liberalization—was irreversible. This analysis sets the stage for discussion of a possibility that scholars have not yet explored: Iroquois could have partly shaped the monetization of New Netherland and thus could have been accountable for its failing monetary policy by deliberately controlling the amount of sewant in circulation.

The History of Money in Montenegro

Abstract The paper depicts the history of using money in Montenegro covering the period before the Christ until nowadays. Montenegro mostly used foreign currencies throughout its long history, these being Roman, Austro-Hungarian, Turkish, Venetian, and even the Napoleon (French gold coin) money. The first ideas for Montenegro’s own money came from the Bishop Petar Petrovic Njegoš in the 19th century. The first Montenegrin money, the Perper, was minted in 1906. The King Nikola`s Decree as of 11 April 1906 authorized the Ministry of Finance to mint the nickel and bronze coins. Silver and gold coins were minted later. The Perper disappeared from the scene with Montenegro’s joining the Kingdom of Serbs, Croats and Slovenes, putting into circulation the Dinar, a currency of the newly established state. Montenegro, being a part of the Socialist Federal Republic of Yugoslavia, used the Dinar as its currency after World War II until 1999. Dual currency system consisting of the German Mark and the Dinar was introduced in late 1999, whereby the German Mark became the only legal tender in 2001. With the introduction of the Euro the German Mark was replaced and the Euro became the official means of payment.

System dwuwalutowy jako rozwiązanie kryzysu strefy euro

Summary: The paper discusses the role of a dual currency system as a solution to prob‑ lems experienced by some eurozone countries, especially Greece. The dual currency system as suggested by the author would consist of the euro and a reintroduced national currency, referred to as the “new drachma”. The concept originates from an analysis of the roots of the present crisis, which include a severe loss of international competitiveness by countries hardest hit by the crisis. The anal‑ ysis leads to the conclusion that devaluation (as opposed to “internal devaluation”) may be crucial to dealing with the problems at hand. Devaluation is impossible without a national currency and – as far as the literature claims – without a redenomination of assets and liabilities, the author says. However, reintroducing a national currency combined with redenomination would produce many legal, political and economic problems, Koronowski says. He investigates these problems and concludes that an exit from the Economic and Monetary Union (EMU) would have disastrous conse‑ quences for the European Union. Meanwhile, a model based on reintroducing a national currency without leaving the EMU would make it possible to minimize, if not completely avoid, these problems, the author says. The article offers an outline of such a model.

The impact of currency clause and exchange rate on Serbian economy

In nineties Serbia survived the disintegration of the former Yugoslavia, intense UN sanctions, and 1999 78 days of bombing by NATO. This has resulted in a drop in production and hyperinflation. The confidence in the national currency the dinar has been lost. In order to do business in Serbia returned to normal framework the Law on Foreign Exchange imposed the possibility of nomination the loans in foreign currencies. This prompted the business, but it meant a de facto legalization of dual currency system. The logical consequence was the high degree of dollarization. It is important to mention that the dual currency system limited the possibilities of monetary policy of the National Bank of Serbia. Dollarization after the first positive results showed their expected bad sides. Appreciation of the dinar was one of the consequences. The trade deficit and foreign debt grew. Due to the appreciation production rate remained at 40% of its 1989 level, and unemployment has risen to 27%. The benefit of the appreciation had only importers and foreign-owned banks. They take out the capital abroad. Therefore, it is necessary to make changes to the Foreign Exchange Law and abolish foreign currency clause at least for a new loans.

The dual currency system of Renaissance Europe

AbstractThe monetary system of late medieval and early modern Europe has been commonly described as irrational, in the light of later commodity money standards. In particular, the alterations in the legal value and/or in the metal content of most coins throughout this period have been regarded as a source of disorder and as a product of ignorance and abuse. This article suggests that the whole system, and its apparently awkward articulations, may have been deliberately designed to ensure complementarity between domestic and foreign trade. From this perspective, monetary alterations appear as the levers of a peculiar form of monetary policy, with an extra degree of freedom compared to more modern instruments, and equally open to being managed or mismanaged.

Sustaining cultural vitality in a globalizing world: the Balinese example

It is generally accepted that massive tourism and a vibrant indigenous culture are mutually exclusive. Bali has so far proven to be an exception to this rule. This article explores a hitherto overlooked socio‐economic mechanism behind that exception. It is a dual complementary currency system used for centuries by highly decentralized and democratic decision‐making organizations. The reasons why such a dual currency system is so effective in mobilizing popular cultural creativity is investigated, and a systems framework is proposed to determine the conditions under which this model could be applicable outside of Bali. This framework is then tested with a second case study: traditional shell currencies in Papua New Guinea. Finally, some potential applications in areas in the world other than traditional cultures are portrayed.

The Dual Currency System in China: Cost and Benefit

The People's Republic of China has a dual local currency system. The common currency for the Chinese is the renminbi (RMB). Foreigners are expected to use the Foreign Exchange Certificate (FEC). The FECs were introduced on April 1, 1980.

The Economics of Common Currencies.

Foreword Robert A Mundell Participants Introduction Harry G Johnson and Alexander K Swoboda Part 1: The Economics of Fixed Exchange Rates 1. Two Arguments for Fixed Rates Arthur B Laffer Comments Gottfried Haberler, Bela Balassa 2. The Flexibility of the Gold-Exchange Standard and Its Limits Jurg Niehans 3. The Price-Specie-Flow Mechanism and the Gold Exchange Standard: Some Exploratory Empiricism Relating to the Endogeneity of Country Money Balances Thomas J Courchene 4. The Dual Currency System Revisited Ronald I McKinnon Part 2: The Economics of Common Currency Areas 5. Some Early Views on Monetary Integration Thomas Guggenheim 6. The Theory of Optimum Regional Associations Herbert G Grubel 7. Uncommon Arguments for Common Currencies Robert A Mundell 8. Policy Conflict, Inconsistent Goals and the Co-ordination of Economic Policies Alexander K Swoboda 9. A Plan for a European Currency Robert A Mundell Comment Bela Balassa 10. The Impact of External Markets for National Currencies on Central Bank Reserves Robert Z Aliber 11. Joint Balance: Capital Mobility and the Monetary system of a Currency Area Sven W Arndt 12. Optimum Currency Areas and Latin America Alexandre Kafka Part 3: The Economics of Flexible Exchange Rates 13. The US Balance of Payments: Freedom or Controls Gottfried Haberler 14. Flexing the International Monetary System: The Case for Gliding Parities Richard N Cooper 15. Specific Proposal for Limited Exchange Rate Flexibility William Fellner 16. Flexible Exchange Rates and Traded Goods Prices: The Role of Oligopoly Pricing in the Canadian Experience Robert M Dunn, Jr. 17. The Optimal Rate of Devaluation Ruben Almonacid Manuel Guitian. Index

Optimum world monetary arrangements and the dual currency system

Recently some concerns have been expressed over constraints placed on American monetary and fiscal policy by balance of payments problems. Conversely, the attempts of several European countries to control inflation have been hampered by large capital inflows attracted by high interest rates. Thus, the “Group of Ten” members of the International Monetary Fund recently appointed a study committee to examine world monetary arrangements, particularly liquidity needs. The present work discusses optimum world monetary arrangements, which would seem to be significantly different from present arrangements. The different economic needs and positions of various areas are distinguished; in particular, the internal problems of Western Europe are differentiated from the position of Western Europe vis-a-vis the United States. JEL: E42, F33