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Key Currencies and Financial Centres

  • Charles P. Kindleberger
Part of the Trade Policy Research Centre book series (TPRC)

Abstract

The subject of key currencies would seem to be more closely associated with the work of John H. Williams than with Herbert Giersch. It is nonetheless an appropriate subject for this volume since Professor Giersch is a key economist in a key country with what may well be the next key currency. I propose in this essay to discuss the question of whether the arrangements for international money should be organised hierarchically, with a single key currency standing at the apex of a world system—whether two or more such currencies can serve effectively if no single currency stands out following the weakening of the dollar—and to explore a bit of European financial history in search of insights, analogies or contrasts with the present.

Keywords

International Monetary Fund Financial Centre Single Currency Kennedy Round Special Draw Right 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Notes and References

  1. 1.
    See John H. Williams, Postwar Monetary Plans and Other Essays, 3rd rev. and expanded ed. (New York: Knopf, 1947) passim. The index for this edition has almost four inches of citations under the headings ‘key countries’ and ‘key currencies’.Google Scholar
  2. 3.
    Susan Strange, Sterling and British Policy: a Political Study of an International Currency in Decline (London: Oxford University Press, 1971).Google Scholar
  3. 4.
    See Charles P. Kindleberger, The World in Depression, 1929–1939 (Berkeley: University of California Press, 1973), pp. 154–55.Google Scholar
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    See Gerard and Victoria Curzon, ‘Options after the Kennedy Round’, in Harry G. Johnson (ed.), New Trade Strategy for the World Economy (London: Allen & Unwin, for the Trade Policy Research Centre, 1969), pp. 34–36.Google Scholar
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    See Kindleberger, The Formation of Financial Centers: a Study in Comparative Economic History, Princeton Studies in International Finance, No. 36 (1974), repr. in Economic Response, Comparative Studies in Trade, Finance and Growth (Cambridge, Mass.: Harvard University Press, 1978), pp. 66–134.Google Scholar
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  12. 11.
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  21. Oskar Morgenstern, International Financial Transactions and Business Cycles (Princeton: Princeton University Press, for the National Bureau of Economic Research, 1959), p. 128, states that Paris emerges as the strongest (his italics) financial centre in the world before 1914 if the fact that its short-term interest rate is the lowest is an indication of strength. Franco Bonelli simply asserts that Paris was the real centre for regulating world liquidity at the beginning of the second half of 1907, but this may reflect a particular Italian view since Italian finances were tied to Paris; see La crisi del 1907: una tappa dello sviluppo industriale in Italia (Turin: Fondazione Luigi Einaudi, 1971), p. 42.Google Scholar
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    See Walter Bagehot, ‘Lombard Street’, in The Collected Works of Walter Bagehot, Vol. IX, ed. by Norman St John-Stevas (London: The Economist, 1978), p. 63.Google Scholar
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    See Charles A. Coombs, The Arena of International Finance (New York: John Wiley, 1976), pp. 96–98.Google Scholar
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    For details of these operations and sources, see Kindleberger, Manias, Panics and Crashes (New York: Basic Books, 1978), Ch. X, ‘The International Lender of Last Resort’.Google Scholar
  26. 23.
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  28. 26.
    See Braudel, Afterthoughts on Material Civilization and Capitalism, op. cit., p. 87; and José-Gentil da Silva, Banque et credit en Italie au XVIIesiècle (Paris: Ed. Klincksieck, 1969), pp. 38–40.Google Scholar
  29. 28.
    Violet Barbour, Capitalism in Amsterdam in the Seventeenth Century (Ann Arbor: University of Michigan Press, 1966), p. 50.Google Scholar
  30. 29.
    Jonathan R. T. Hughes, Fluctuations in Trade, Industry and Finance: a Study of British Economic Development, 1850–1860 (Oxford: Clarendon Press, 1960), pp. 243 et seq. and esp. p. 247.Google Scholar
  31. Michel Chevalier, On the Probable Fall in the Value of Gold, transl. by Richard Gobden, 3rd ed. (Manchester: Alexander Ireland, 1859) calls the exchange of gold for silver in France a ‘parachute’ that retarded the fall in the price of gold.Google Scholar
  32. 32.
    Sir John Clapham, The Bank of England: a History (Cambridge: Cambridge University Press, 1958), Vol. II, pp. 170, 291–94, 329–30 and 344;Google Scholar
  33. and Jacob Viner, Studies in the Theory of International Trade (New York: Harpers, 1937), p. 273.Google Scholar

Copyright information

© Trade Policy Research Centre 1983

Authors and Affiliations

  • Charles P. Kindleberger

There are no affiliations available

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