The Federal Reserve, the Bank of England, and the Rise of the Dollar as an International Currency, 1914-1939

Marc Flandreau Barry Eichengreen ()
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Marc Flandreau Barry Eichengreen: IUHEID, The Graduate Institute of International and Development Studies, Geneva
Authors registered in the RePEc Author Service: Barry Eichengreen and Marc Flandreau

No 16-2010, IHEID Working Papers from Economics Section, The Graduate Institute of International Studies

Abstract: This paper provides new evidence on the rise of the dollar as an international currency, focusing on its role in the conduct of trade and the provision of trade credit. We show that the shift to the dollar occurred much earlier than conventionally supposed: during and immediately after World War I. Not just market forces but also policy support – the Fed in its role as market maker – was important for the dollar’s overtaking of sterling as the leading international currency. On balance, this experience challenges the popular notion of international currency status as being determined mainly by market size. It suggests that the popular image of strongly increasing returns and pervasive network externalities leaving room for only one monetary technology is misleading.

Keywords: international currency; trade credit; network externalities (search for similar items in EconPapers)
Pages: 34 pages
Date: 2010-08
New Economics Papers: this item is included in nep-cba, nep-his, nep-ifn, nep-mon and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Related works:
Journal Article: The Federal Reserve, the Bank of England, and the Rise of the Dollar as an International Currency, 1914–1939 (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:gii:giihei:heidwp16-2010

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