Eras of Monetary and Financial Dominance: A Copernican-Type Model of Multilayered Network with Endogenous Regimes

Michael D. Bordo () and Cécile Bastidon ()
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Michael D. Bordo: Rutgers University
Cécile Bastidon: Toulon University, Campus Porte d’Italie

Open Economies Review, 2025, vol. 36, issue 5, No 1, 1309-1344

Abstract: Abstract Purpose: Recent theoretical advances focus on the configuration and crises of the International Monetary System (IMS) and International Financial System (IFS) rather than their regime switchings. We argue that viewing the evolution of the IMS and IFS in the past several hundred years through the lens of the Copernican heliocentric system developed over five hundred years ago is insightful. Methods: The network representations used today for the study of the IMS and IFS can be directly transposed into the langage of stellar systems. We connect literatures in economic history and the theory of complex networks with some resonant concepts from astrophysics. We trace out the evolution across regimes of the IMS and IFS in terms of network representations of the Copernican system. Results: We provide a simple, fully testable theoretical model completed by a calibration exercise that does generate the observed historical dynamics. The IMS and IFS are described by a two-layer multiplex graph whose three key features (hub, core and distances) are affected by non-linear joint regime changes linked to a technological, institutional, geopolitical and regulatory environment variable. Conclusion: We conclude with a discussion of some perspectives of the future of the international monetary and financial systems, particularly with regard to the inertia of eras of monetary and financial dominance.

Keywords: International monetary system; International financial system; Currency dominance; International financial centers; Monetary and financial networks; Econophysics (search for similar items in EconPapers)
JEL-codes: C3 E42 F33 G15 N2 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11079-025-09797-6

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