World Currency Research Articles

Why Not a Global Currency?

It appears likely that the number of currencies in the world, having proliferated along with the number of countries over the past 50 years, will decline sharply over the next two decades. The question I plan to pose here is: where, from an economic point of view, should we aim for this process to stop? Should there be a single world currency, as Richard Cooper (1984) boldly envisioned? Should there remain multiple major currencies but with a much stricter arrangement among them for stabilizing exchange rates, as say Ronald McKinnon (1984) or John Williamson (1993) recommended? Building on Maurice Obstfeld and Rogoff (2000b, d), I will argue here that the status quo arrangement among the dollar, yen, and euro (which I take to be benign neglect) is not far from optimal, not only for now but well into the new century. And it would remain a good system even if political obstacles to achieving greater monetary policy coordination (or even a common world currency) could be overcome. Again, this is not a paper on, say, the pros and cons of dollarization for small and medium-sized economies, but rather on arrangements among the core currencies. Any blueprint for the future core of the world currency system involves some crystal-ball gazing. But at the same time, recent research in international macroeconomics offers several important insights that can help inform the discussion.

Solving the Currency Conundrum

This paper reviews the prospects for the exchange rate system in different parts of the world. It discounts radical changes like a single world currency and a trio of regional monetary unions: in Europe, where intergration is political as well as economic and financial, the euro should provide the basis for an expanding zone of monetary stability; in the Americas, in contrast, dollarization is likely to be the solution for countries with strong financial links to the USA that find it difficult to run an autonomous monetary policy; and in Asia, continued floating is the only plausible outcome, given the obstacles to the alternatives.(J.E.L.: F3)

Dismantling the cross of gold: economic crises and U.S. monetary policy

The advent of the Euro has put the spotlight on international monetary policy. Could a new world currency be created? Could there be a return to international fixed exchange rates? The history of the American response to the gold standard in its various forms suggests one theme. At key moments during the 20th century, the U.S. chose domestic monetary sovereignty over international obligations. This address traces the history of American attitudes toward gold from the 1890s to the present. That history suggests that creation of any currency system requiring loss of U.S. national monetary sovereignty is most unlikely.

Towards a New International Monetary Order: The World Currency Unit and the Global Indexed Bond

Towards a New International Monetary Order: The World Currency Unit and the Global Indexed Bond

Globalization without Global Money: The Double Role of the Dollar as National Currency and World Currency

(2000). Globalization without Global Money: The Double Role of the Dollar as National Currency and World Currency. Journal of Post Keynesian Economics: Vol. 22, No. 3, pp. 365-395.

The Fruits of Natural Advantage: Making the Industrial Countryside in California

By around 1940, when Steven Stoll's richly detailed and compelling book concludes, California's position as the globe's plant-commodity juggernaut was almost fully realized. So was the heartless image of California's agribusiness leadership; news of thuggish repression of migrant harvesters had become the world's currency, and Carey McWilliams's lawyerly expose, Factories in the Fields, and John Steinbeck's bitter novel The Grapes of Wrath (both published in 1939) compounded the damage. Here were the inevitable results of California's "natural advantage"--its Mediterranean, desert, and mountain-slope subclimates; its subsidized irrigation; its efficient railway and shipping system; its clever and aggressive university and corporate scientists; and especially its ingenious class of agricultural entrepreneurs, many of them newcomers who seemed to shuck off agrarian sentimentalism as they crossed into the Golden State.

A compartmentalised model for the estimation of the cost of coccidiosis to the world's chicken production industry

A compartmentalised model is presented for the estimation of the monetary losses suffered by the world's poultry industry resulting from coccidiosis of chickens and costs of its control. The model is designed so that the major elements of loss may be separately quantified for any chicken-producing entity, e.g., a farm, a poultry company, a country, etc. Examples are presented and the sources, reliability and geographical relevance of the data used for each parameter are provided. Loss elements for specific geographical areas should be recalculated at appropriate intervals to take into account local and international fluctuations in costs of chicks, feed, labour, financial inflation and world currency exchange rates. Equations are given for relationships among numbers of chickens, liveweights, weights of carcasses, feed consumptions, feed conversion ratio (FCR), prices of feeds, prices of anticoccidial therapeutic and prophylactic drugs, values of chickens, chicken rearing costs; and effects of coccidiosis on mortality, weight gain and FCR. Using these equations, it is theoretically possible for an international team of representatives, each using reliable local data, to calculate simultaneously each relevant loss element for their respective countries. Addition of these elements could give, for the first time, an accurate global estimate of the losses due to chicken coccidiosis. The total cost of coccidiosis in chickens in the United Kingdom in 1995 is estimated to have been at least GB£38 588 795, of which 98.1% involved broilers (80.6% due to effects on mortality, weight gain and feed conversion, and 17.5% due to the cost of chemoprophylaxis and therapy). The costs of poor performance due to coccidiosis and its chemical control totalled 4.54% of the gross revenue from UK sales of live broilers. This model includes a new method for comparing the profitabilities of different treatments in commercial trials, providing actual costs rather than the arbitrary numerical scores of other methods. Although originally designed for the study of coccidiosis, the model is equally applicable to any disease. It should be of value to agricultural economists, the animal feed and poultry industries, animal health companies, and to research scientists (particularly for preparing grant applications).

Selling Nature to save It? Biodiversity and Green Developmentalism

New supranational environmental institutions, including the Convention on Biological Diversity (CBD) and the ‘green’ World Bank, reflect attempts to regulate international flows of ‘natural capital’ by means of an approach I call ‘green developmentalism’. These institutions are sources of eco-development dollars and of a new ‘global’ discourse, a postneoliberal environmental-economic paradigm. By the logic of this paradigm, nature is constructed as a world currency and ecosystems arc recoded as warehouses of genetic resources for biotechnology industries. Nature would earn its own right to survive through international trade in ecosystem services and permits to pollute, access to tourism and research sites, and exports of timber, minerals, and intellectual property rights to traditional crop varieties and shamans' recipes. I contend that green developmentalism, with its promise of market solutions to environmental problems, is blunting the North-South disputes that have embroiled international environmental institutions. But by valuing local nature in relation to international markets—denominating diversity in dollars, euros, or yen—green developmentalism abstracts nature from its spatial and social contexts and reinforces the claims of global elites to the greatest share of the earth's biomass and all it contains. Meanwhile, the CBD has become a gathering ground for transnational coalitions of indigenous, peasant, and NGO opponents of ‘biopiracy’ and the patenting of living things, and advocates of international environmental justice. They have begun to put forward counterdiscourses and alternative practices to those of green developmentalism.

Global money market interrelationships

This study extends the literature dealing with money market interrelationships by analyzing the behavior of yields on assets denominated in five major world currencies in three different geographic markets within a multivariate cointegration framework. Basic findings include: (1) same currency money market yields are cointegrated across countries; (2) domestic markets and the Eurocurrency markets are closely linked, as are the Eurocurrency markets and the Asian currency markets; (3) the relationships between domestic markets and the Asian offshore markets are the weakest of those tested; and (4) only one common factor in three geographic markets indicates a global market, whereas significant causal effects suggest that a degree of market segmentation remains.

Exchange Rates in the East Asian Crisis

This paper looks at the recent history of East Asian exchange rate regimes in the context of the wider international discussion of exchange rates. It examines whether the exchange rate regimes were a cause of the crisis, or whether the crisis would have emerged under alternative exchange rate regimes. It focuses on the relationship between the exchange rate regime and the recovery process. It then asks whether exchange controls can help in maintenance of exchange rate and economic stability. The article concludes with a discussion of how the recent experience may affect future choice of exchange rate regimes. The sense of crisis in East Asia in the third quarter of 1997 was generated by the successive collapse of several Southeast Asian currencies, followed by the Korean won in the fourth quarter. The problems were later felt more generally as a financial and an economic crisis. There is a consensus amongst economists and policy makers that the exchange rate regimes that were applied in Southeast Asia and Korea immediately prior to the crisis were flawed, and contributed substantially to the catastrophic decline in economic output in the year or so from mid-1997. There is as yet no consensus on the exchange rate regimes that are most suited to the restoration of sustained growth through East Asia. By the mid-1990s, most East Asian economies had settled into de facto pegging of their currencies against the U.S. dollar. The pegs were articulated with varying degrees of commitment by the monetary authorities and sometimes but not always were accompanied by deliberately complementary domestic demand policies. A few of the pegs were supported by intrusive exchange controls. The main exception to the de facto peg was Japan, which had floated the yen ever since the breakdown of the Bretton Woods system of firmly fixed (but adjustable) exchange rates in the early 1970s. All currencies in the region had been through periods of floating rates or major changes of parity over the preceding two decades, before sliding into a de facto peg against the U.S. dollar. The shift to the de facto peg had occurred early in Hong Kong (in 1983, after a period of great volatility of a floating rate), and was most recent for Taiwan. The de facto pegs were mostly blown apart by the crisis, and succeeded by floating currencies. The floating rates were widely seen as being temporary, but the monetary authorities so far have had little to say about their likely longevity, or about the regimes that are likely to succeed them. The exceptions to the shift to floating rates are Hong Kong and China, which have staunchly and so far successfully defended the 1997 parities against the U.S. dollar; Vietnam, which has devalued its currency but moved to a lower, fixed rate; and Malaysia, which returned to a fixed parity, at a lower rate, in the third quarter of 1998, after a little over a year of major depreciation within a floating rate. This article looks at the recent history of East Asian exchange rate regimes in the context of the wider international discussion of exchange rates. It examines whether the exchange rate regimes were a cause of crisis, or whether the crisis would have emerged under alternative exchange rate regimes. It focuses on the relationship between the exchange rate regime and the recovery process. It then asks whether exchange controls can help in maintenance of exchange rate and economic stability. The article concludes with discussion of how the recent experience may affect future choice of exchange rate regimes. Exchange Rates: Evolving Regimes in International Perspective Most East Asian economies were members of the global system of fixed exchange rates until the collapse of the Bretton Woods system in the early 1970s. Some were comfortable members, while others had great difficulty in reconciling a fixed exchange rate against major world currencies with its implications for domestic demand management. …

Corporate governance: an international state of the art

Corporate governance has as ancient a pedigree as the formation of companies. However, six contemporary developments have provided a focus which makes this the era par excellence of corporate governance. Under review are a representative set of the economies of the world. A start is made with the UK and the Cadbury Report, which in similar fashion to the development of British Quality Standard 5750 into ISO 9000, has now itself taken on world currency. The end piece of Cadbury‐related developments was the final Report of the Hampel Committee of January 1998. The USA spawned several reports which fed into the Cadbury initiative, notably the Treadway and COSO Reports, as well as the influence of the Securities and Exchange Commission. A consideration of Canada is followed by the European dimension and the study carried out by Ernst and Young. Finally South Africa, Australia and Japan are treated and conclusions drawn, including the collaborative partnership that may be formed between management accountants and internal auditors.

What the euro means for the dollar and the international Monetary system

This article begins by analyzing the hirtorical importance of the introduction of the euro, the convergence criteria for membership in the European Monetary Union, the merits and defects of the euro as an international rival to the dollar, and the characteristics that have made past international currencies great. It goes on to consider the institutional gap in the world system arising from the absence of an official world currency and the threat to stability that arises in transition periods when a new international reserve asset or currency is phased in. It is argued that the introduction of the euro will involve diversification from the dollar that will require multilateral attention to the dollar-euro exchange rate.

Information: The world's new currency isn't scarce

Today, information technology innovations have created a global financial casino where as much as $1.3 trillion of currencies and “virtual securities” (derivatives of underlying real stocks, bonds, commodities, and currencies) are traded each day—bringing new uncertainties such as raids on the dollar, sterling, and other major currencies and scenarios of financial collapse. Worried central bankers and national politicians, trying to stave off such scenarios, are left with failing textbook economic remedies to support their domestic economies and currencies (such as raising interest rates or buying efforts). These national players, handicapped by eroding national sovereignty, maneuver painfully toward the social innovation needed to match the advance of the global casino's computer and satellite‐based technological innovation. 1

Optical coatings for document security

Optical coatings that shift color with viewing angle have been adapted into optically variable foils, pigments, and inks to prevent color copying by color copiers, printers, cameras, or lithographic reproduction. Metal-dielectric multilayer thin-film structures have large color shifts with angle, high chroma, a large color gamut, and light fastness that make them uniquely suited for security inks. World currencies are now protected by these structures.

Plausibility, imaginative geographies and a global foreign currency exchange: Comments on Mendez

Ruben Mendez has set several cats among the pigeons with his short artide on the global foreign currency market. In the course of just twelve pages Mendez manages to: (1) effectively critique some aspects of the proposed Tobin tax on foreign exchange transactions; (2) outline a case for establishing a computer-based global foreign currency exchange (FXE) that would lower the cost to final consumers of changing currencies and bring order and efficiency to the world's foreign currency markets; (3) suggest how revenues generated from the FXE might be used to finance public goods that would improve global governance; and (4) propose an increased flow of north-south funds from a small levy on the profits of the FXE. We applaud the ambition of Mendez's article, even though we have some reservations about his conceptions of order, markets and governance in an age of transnational liberalism. Mendez is addressing some crucial issues in international political economy as indeed is Tobin and his intervention is richly suggestive of the proper functions and duties of an intellectual. As we read him, Mendez is trying to provide a plausible solution to the pressing practical problem of foreign exchange regulation, even as he seeks to provide an imaginative language that allows us to rethink our obligations to distant strangers. It is these issues of plausibility and imagination that we focus on here.

The international monetary system: The missing factor

Are present international monetary arrangements optimal? My answer is no. There is a missing ingredient in the international monetary system. The missing ingredient is a world currency, and until such a facility is created, the existing arrangements, while likely to continue, will be, at best, second best. Restoration of the gold standard at the current dollar price of gold, however, would result in deflation if the restoration led to an increase in the demand for gold (as it undoubtedly would). Gold would again become a standard of value if and only if it were made stable in terms of currencies.

The Inflation Tax and the Marginal Welfare Cost in a World of Currency and Deposits

The Inflation Tax and the Marginal Welfare Cost in a World of Currency and Deposits

THE INFORMAL SECTOR TRADE AMONG SUB‐SAHARAN AFRICAN COUNTRIES: A SURVEY AND EMPIRICAL INVESTIGATION

The Developing EconomiesVolume 31, Issue 2 p. 151-170 Free Access THE INFORMAL SECTOR TRADE AMONG SUB-SAHARAN AFRICAN COUNTRIES: A SURVEY AND EMPIRICAL INVESTIGATION Jérémie DONGALA, Jérémie DONGALASearch for more papers by this author Jérémie DONGALA, Jérémie DONGALASearch for more papers by this author First published: June 1993 https://doi.org/10.1111/j.1746-1049.1993.tb00019.xCitations: 1 This author was a research fellow at the Japan Center for International Finance (JCIF) when this paper was written. He is grateful for the financial support from this institution. Opinions and analyses expressed are those of the author and not necessarily of the institution with which he is affiliated. AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL References 1 African Development Bank. Economic Report on Africa ( Abidjan : African Development Bank and Economic Commission for Africa, 1987). 2 African Development Bank. “ Stimulating Productivity in Sub-Saharan Africa,” An agenda for action devised at a conference held in Abidjan , 1988. 3 Bhatia, R. The West African Monetary Union: An Analytical Survey, Occasional Paper No. 35 ( Washington , D.C. : International Monetary Fund, 1985). 4 Codo, L. C. Incidences économiques des flux transfrontaliers clandestins: Le cas du Nigeria et du Benin,” Afrique contemporaine, No. 140 (OctoberNovember 1986). 5 Eboue, C. M. Epargne informelle et développement économique en Afrique, Mondes en développement, Vol. 16, No. 62–63 (1988). 6 European Communities. Foreign Trade Statistics ( Luxembourg ). 7 Feige, E. L. How Big Is the Irregular Economy Challenge, Vol. 22, No. 5 (November 1979). 8 First, T. Black Gold: The Mozambican Miner, Proletarian and Peasant ( New York : St. Martin's Press, 1983). 9 Gutman, P. M. Subterranean Economy, Financial Analyst Journal, Vol. 33, No. 5 (September 1977). 10 Helleiner, G. K. Comments on ‘Comparative Advantage and Structural Transformation: A Review of Africa's Economic Development Experience,'” in The State of Development Economics: Progress and Perspectives, Ed. G. Ranis and T. P. Schultz ( New York : Basil Blackwell, 1988). 11 International Currency Analysis, Inc. World Currency Yearbook ( Birmingham , Ala. ). 12 International Labour Organisation. Employment, Incomes, and Equality: A Strategy for Increasing Productive Employment in Kenya ( Geneva , 1972). 13 International Monetary Fund. Government Finance Statistics ( Washington , D.C. ). 14 International Monetary Fund. International Financial Statistics ( Washington , D.C. ). 15 Johnson, O. E. G. Trade Tax and Exchange Rate Coordination in the Context of Border Trading: A Theoretical Analysis, International Monetary Fund Staff Papers, Vol. 34, No. 3 (September 1987). 16 Keou, R. G. Le SA: Une tontine du Cameroun et la prévention de la délinquance” (quoted in Eboue [5]). 17 McDonald, D. C. Trade Data Discrepancies and the Incentive to Smuggle: An Empirical Analysis, International Monetary Fund Staff Papers, Vol. 32, No. 4 (December 1985). 18 Maciejewski, E. B. Real Effective Exchange Rates Indices: A Reexamination of the Major Conceptual and Methodological Issues, International Monetary Fund Staff Papers, Vol. 30, No. 3 (September 1983). 19 May, E. Exchange Controls and Parallel Markets in Foreign Exchange in Sub-Saharan Africa: Focus on Ghana, World Bank Staff Working Papers No. 711 ( Washington , D.C. , 1985). 20 Miracle, M. P.; Miracle, D.S.; and Cohen, L. Informal Savings Mobilization in Africa, Economic Development and Cultural Change, Vol. 28, No. 4 (July 1980). 21 Pick's Currency Yearbook ( New York : Pick Publishing Corporation). 22 Siggels, E. Protection, Distortions and Investment Incentives in Zaire, Journal of Development Economics, Vol. 22, No. 2 (July-August 1986). 23 Tanzi, V. The Underground Economy in the United States: Annual Estimates, 1930-80, International Monetary Fund Staff Papers, Vol. 30, No. 2 (June 1983). 24 Toumi, M. Circuits officiels et réseaux parallèles en Afrique, Science et vie économie, No. 24 (January 1987). 25 World Bank. Demographic Aspects of Migration in West Africa, 2 vols., World Bank Staff Working Papers Nos. 414 and 415 ( Washington , D.C. , 1980). 26 World Bank. Sub-Saharan Africa: From Crisis to Sustainable Growth: A Long-term Perspective Study ( Washington , D.C. , 1989). Citing Literature Volume31, Issue2June 1993Pages 151-170 ReferencesRelatedInformation

Measuring global money market interrelationships: An investigation of five major world currencies

This paper extends the study of global money market integration in two primary directions. First, a technique which combines stationarity and cointegration tests as a basis for constructing an error correction model is applied to assess the existence of long-run equilibrium relationships between money market series. Second, analysis for the increasingly significant Asian offshore markets of Singapore and Hong Kong is added to traditional European and national markets analysis. Major findings are (1) the error correction model is an appropriate technique for identifying causality relationships and (2) major domestic markets and included offshore markets are partially segmented.

Macroeconomic adjustment and inconvertible currencies in the third world

In 1987, Zimbabwe experienced serious difficulties in expanding mineral production, notably gold, due to a shortage of foreign exchange for the importation of spare parts and mining equipment ["Zimbabwe Survey," 1987]. Since gold can easily be converted into foreign currency, this may seem rather startling and paradoxical on a superficial level. Foreign exchange production declined as a result of a foreign exchange shortage. Similarly, in 1979, a World Bank Program loan was used to fmance the foreign exchange requirements of Jamaica's export industries. In theory, the profitable production of exports should generate more foreign exchange than it requires. The World Bank loan should have been completely unnecessary ['Report and Recommendation, ~ 1979]. Throughout the Developing World, there are many more examples of such self-perpetuating foreign exchange shortages. Often such countries undergo what is known in the local press as a "foreign exchange crisis:" a catastrophic collapse of the economy's ability to maintain the flow of essential imports resulting in draconian trade and exchange controls. Although terms of trade fluctuations or disturbances in world markets may play a role, "foreign exchange crises" typically arise when governments allow their domestic currencies to become seriously overvalued but resist devaluation because they feel that it will fan the flames of inflation. For a period of time, external borrowing or reserve depletion can maintain import levels, but sooner or later these wells run dry. Then the government must resort to foreign exchange or import controls if the authorities still cannot accept a devaluation. This creates a new foreign exchange regime-one where quotas are used to reduce import levels to the available supply of foreign exchange. Because such regimes involve a fixed exchange rate at which the Central Bank buys foreign exchange and sells rationed amounts of foreign exchange, they can be confused with standard, fixed exchange rate regimes. But there is a vital difference between these two types of regimes. Under a standard, fixed rate regime, the Central Bank buys and sells foreign exchange to equilibrate the supply and demand for foreign exchange. By contrast, in an import control regime, the Central Bank does not have usable foreign exchange reserves to sell. It must ration imports in order to reduce the level of demand for foreign exchange. Many attempts to model the effects of import controls, such as Occampo [1987] are not as useful as they first appear because they treat import controls as exogenous, rather than determining the quotas as a result of foreign exchange availability. Consequently, they are not true general equilibrium models. Although they are common in the Third Wodd, there is little good general equilibrium literature on this topic. McKinnon [1979, p. 440], in a review of the multiple volume NBER study, Foreign Trade Regimes and Economic Development, headed by Bhagwati and Krueger, pointed out that "Devaluation in the presence of exchange controls and other QRs has not been well worked out in