Jump to ContentJump to Main Navigation
Currency StatecraftMonetary Rivalry and Geopolitical Ambition$
Users without a subscription are not able to see the full content.

Benjamin J. Cohen

Print publication date: 2018

Print ISBN-13: 9780226587691

Published to University Press Scholarship Online: May 2019

DOI: 10.7208/chicago/9780226587868.001.0001

Show Summary Details
Page of
date: 29 May 2020

From Currency to Capabilities

From Currency to Capabilities

Chapter:
(p.13) One From Currency to Capabilities
Source:
Currency Statecraft
Author(s):

Benjamin J. Cohen

Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226587868.003.0002

This chapter provides a brief introduction to the nature of currency internationalization and its implications for state power. Currencies may play a variety of roles both within markets and between governments. The driving force behind currency internationalization is competition. Five types of power resource are particularly influential in determining the competitiveness of a currency: economic size, financial development, foreign-policy ties, military reach, and effective governance. Differing degrees of competitiveness create a hierarchy among moneys a Currency Pyramid that is narrow at the top, where one or a few moneys dominate, and increasingly broad below, reflecting descending levels of competitiveness. Hierarchy, in turn, suggests varying degrees of reciprocal influence. Currency capabilities are derived from broader patterns of monetary power among states, which are a reflection of each country’s ability to delay or deflect the costs of adjustment to external equilibrium. An international currency adds to a country’s power to delay by augmenting the nation’s overall liquidity position. Since international moneys typically play different combinations of roles, potential degrees of currency power may vary considerably as well.

Keywords:   currency internationalization, currency competition, currency pyramid, monetary power, currency power, adjustment costs

University Press Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us .