The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Foreign Exchange Markets, History of

  • Marcello de Cecco
Reference work entry


Foreign exchange transactions, known in classical antiquity, developed into markets in the Middle Ages. Italian dealers dominated the market until the 16th century, when they started being replaced by the Dutch and English. The City of London has been the centre of world forex markets since the 18th century and remains dominant even today. Transaction modes have been revolutionized by information technology. Volume has also grown enormously. But personal contact is still important, hence financial centres persist. The arrival of the euro has had consequences for the forex market are discussed, as will the emergence of China.


Arbitrage Bills of exchange China, economics in Derivatives Euro European Central Bank European Monetary Union Fiat money Foreign exchange controls Foreign exchange markets Information technology Interest Specie-flow mechanism Speculation Usury 

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© Macmillan Publishers Ltd. 2018

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  • Marcello de Cecco
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