DP5129 The Ties that Divide. A Network Analysis of the International Monetary System

Author(s): Marc Flandreau, Clemens Jobst
Publication Date: July 2005
Keyword(s): international monetary system, key currency, networks, pound sterling
JEL(s): F31, N32
Programme Areas: International Macroeconomics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=5129

This paper provides a new methodology to map international monetary relations in the 19th century. We identify an index of international liquidity and, applying techniques borrowed from formal network analysis (in particular, blockmodelling) we produce a formal ranking of currencies according to their degree of international circulation. The resulting indices are powerful tools to study the logic of the emergence of international currencies, as well as useful controls for cross-section regressions.