City Research Online

Abstract

The standard framework for debating the international currency system provides an opening to doubts about the dollar’s continuing hegemonic position because it provides an opening to doubts about the US’ ability to finance its external liabilities in the face of worsening economic fundamentals. This paper closes down these openings by adding to the usual matrix linking money’s international functions to two different types of agents, private and official, a second matrix linking money’s functions to two different types of commodities, material goods and services on the one hand and financial securities on the other. Once it is understood that bonds and equities are now not only types of funding instrument but also types of commodity whose use values to the world’s large investors are to serve as stores of value, it is then possible to understand why the huge size of the US capital markets will long continue to bind foreign investors to the dollar because it will be long before other capital markets will reach a comparable size.

Publication Type:	Article
Additional Information:	This is the peer reviewed version of the following article: Kaltenbrunner, A. and Lysandrou, P. (2017). The US Dollar's Continuing Hegemony as an International Currency: A Double-matrix Analysis. Development And Change, 48(4), pp. 663-691, which has been published in final form at https://doi.org/10.1111/dech.12318. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.
Subjects:	E History America > E151 United States (General) H Social Sciences > HG Finance
Departments:	School of Policy & Global Affairs > International Politics
SWORD Depositor:	Symplectic Administrator

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