Working Paper: CEPR ID: DP5129
Authors: Marc Flandreau; Clemens Jobst
Abstract: This paper provides a new methodology to map international monetary relations in the 19th century. We identify an index of international liquidity and, applying techniques borrowed from formal network analysis (in particular, blockmodelling) we produce a formal ranking of currencies according to their degree of international circulation. The resulting indices are powerful tools to study the logic of the emergence of international currencies, as well as useful controls for cross-section regressions.
Keywords: international monetary system; key currency; networks; pound sterling
JEL Codes: F31; N32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| International circulation of a currency (F33) | A country's ability to engage in external adjustment mechanisms (F32) |
| Core countries' ability to circulate debts denominated in their own currencies (F34) | Economic performance (P17) |
| Monetary structure differences (E49) | Systematic differences in macroeconomic behavior (E70) |
| Hierarchical structure of the international monetary system (F33) | Economic disparities among nations (F63) |
| Degree of a currency's international circulation (F31) | A country's economic performance (O57) |