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The rise and fall of the dollar (or when did the dollar replace sterling as the leading reserve currency?)


Much as Paul David described the invention of the mechanical typewriter – it was invented 51 times before being patented by Christopher Sholes in 1867, licensed to the Remington Company and successfully commercialized – the connections between the gold-exchange standard and the Great Depression have been discovered repeatedly. They were discovered by Ehsan Choudhri and Levis Kochin in a seminal article in 1980. They were discovered by Barry Eichengreen and Jeffrey Sachs in articles published in 1985 and 1986. They were discovered by James Hamilton in an insightful article published in 1988. They were discovered by Peter Temin in his Robbins Lectures published in 1989. They were discovered by the now chairman of the Federal Reserve Board in his 1994 Journal of Money Credit and Banking Lecture. Moreover, these contributors to the contemporary literature had important antecedents, including Robert Triffin in the 1950s, Ragnar Nurkse in the 1940s, and Leo Pasvolsky in the 1930s.

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B. Bernanke (1995). The macroeconomics of the Great Depression. Journal of Money, Credit and Banking 27, pp.128.

M. Chinn and J. Frankel (2008). Why the euro will rival the dollar. International Finance 11 (1), pp. 4973.

E. Choudhri and L. Kochin (1980). The exchange rate and the international transmission of business cycle disturbances: some evidence from the Great Depression. Journal of Money, Credit and Banking 12, pp. 565–74.

B. Eichengreen and J. Sachs (1986). Competitive devaluation and the Great Depression: a theoretical reassessment. Economics Letters 22, pp. 6771.

M. Flandreau and F. Gallice (2005). Paris, London and the international money market: lessons from Paribas, 1885–1913. In E. Bussiere and Y. Cassis (eds.), London and Paris as International Financial Centres in the 20th Century. Oxford: Oxford University Press, pp. 78106.

M. Flandreau and C. Jobst (2005). The ties that divide: a network analysis of the international monetary system, 1890–1910. Journal of Economic History 65 (4), pp. 9771007.

M. Flandreau and J. Komlos (2006). Target zones in theory and history: credibility, and policy autonomy. Journal of Monetary Economics 53 (8), pp. 1979–98.

J. Hamilton (1988). The role of the gold standard in propagating the Great Depression. Contemporary Policy Issues 6, pp. 6789.

N. Kiyotaki and R. Wright (1989). On money as a medium of exchange. Journal of Political Economy, 97, pp. 927–54.

P. Krugman (1980). Vehicle currencies and the structure of international exchange. Journal of Money, Credit and Banking 12, pp. 513–26.

A. Maddison (2001). Monitoring the World Economy. Paris: OECD.

K. Mouré (1991). Managing the Franc Poincaré: Economic Understanding and Political Constraint in French Monetary Policy, 1928–1936. Cambridge: Cambridge University Press.

R. Mundell (2000). A reconsideration of the twentieth century. American Economic Review 90, pp. 327–40.

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European Review of Economic History
  • ISSN: 1361-4916
  • EISSN: 1474-0044
  • URL: /core/journals/european-review-of-economic-history
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