Currency Power: Understanding Monetary Rivalry

303 Pages·2015·6.837 MB·English

by  Benjamin J. Cohen

CURRENCY POWER

CURRENCY POWER
Understanding Monetary Rivalry
BENJAMIN J. COHEN
Princeton University Press
Princeton and Oxford
Copyright © 2015 by Princeton University Press
Published by Princeton University Press, 41 William Street, Princeton,
New Jersey 08540
In the United Kingdom: Princeton University Press, 6 Oxford Street,
Woodstock, Oxfordshire OX20 1TW
press.princeton.edu
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All Rights Reserved
ISBN 978- 0- 691- 16785- 5
Library of Congress Control Number 2015941309
British Library Cataloging- in- Publication Data is available
This book has been composed in Sabon LT Std and Avenir LT STd
Printed on acid- free paper. ∞
Printed in the United States of America
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FOR RAE AND ABE,
EVER PRESENT

Contents
List of Tables and Figures ix
Acknowledgments xi
Abbreviations and Acronyms xiii
Introduction 1
1
International Currency 8
2
Power Analysis 28
3
Monetary Power 48
4
From Currency to Power 77
5
From Power to Currency 102
6
Currency Competition Today
(with Tabitha M. Benney) 135
7
The Dollar: Power Undiminished 160
8
The Euro: Power Unrealized 185
9
The Yuan: Power Unstoppable? 214
10
Summing Up 237
viii – CONtENts
Notes 245
References 257
Index 275
Tables and Figures
Table 1.1 The Roles of International Money 9
Table 1.2 Benefits and Risks of an International Currency 19
Table 6.1 Vehicle Currency Role: Currency Shares of the
Global Foreign Exchange Market 145
Table 6.2 Investment Currency Role: Currency Shares
of the International Banking Market 146
Table 6.3 Investment Currency Role: Currency Shares
in the International Securities Market 147
Table 6.4 Reserve Currency Role: Currency Shares of
Foreign Exchange Reserves 149
Table 6.5 Summary of Currency Shares: US Dollar
and Euro (2013) 152
Table 6.6 Concentration Ratios 154
Table 6.7 Herfindahl–Hirschman Indices 156
Figure 1.1 The Currency Pyramid 16
Figure 6.1 Vehicle Currency Role: Currency Shares of
the Global Foreign Exchange Market 145
Figure 6.2 Investment Currency Role: Currency
Shares of the International Banking Market 147
Figure 6.3 Investment Currency Role: Currency Shares
in the International Securities Market 148
Figure 6.4 Reserve Currency Role: Currency Shares of
Foreign Exchange Reserves 150
Figure 6.5 Concentration Ratios (N = 2) 154
Figure 6.6 Concentration Ratios (N = 5) 155
Figure 6.7 Herfindahl– Hirschman Indices 157