reading # 10

reading # 10 - T HE G EOGRAPHY OFMONEY~ BEN.JAMIN . I. (...

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THE GEOGRAPHY OFMONEY~ BEN.JAMIN .I. (;ODEN CORNELL UNIVERSITY PRESS ITHACA AND LONDON
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For Jane- Copyright © 1998 by Cornell University All rights reserved. Except fur brief quotations in a review, this book, or parts thereof, must not be reproduced in any form without permission in writing always a new world to explore from the publisher. For information, address Cornell University Press, Sage House, 512 East State Street, Ithaca, New York 14850. First published 1998 by Cornell University Press First printing, Cornell Paperbacks, 2000 Printed in the United States ofAmerica Library of Congress Cataloging-in-Publication Data Cohen, Benjamin ]. The'geography of money I Benjamin J. Cohen. p. em. Includes index. ISBN 0-8014-3513-7 (cloth: alk. paper) ISBN 0--8014-8513-4 (pbk. : alk. paper) l. International finance. 2. International trade. I. Tide. HG3881.C5856 1998 332'.042--4c21 97-32860 Cornell University Press strives to use environmentally responsible suppliers and materials to the fullest extent possible in the publishing of its books. Such materials include vegetable-based, low-VOC inks and acid-free papers that are recycled, totally chlorine-free, or pardy composed of non wood fibers. Books that bear the logo of the FSC (Forest Stewardship Council) use paper taken from forests that have been inspected and certified as meeting the highest stan- dards for environmental and social responsibility. FOr further information, visit our website at www.comeUpress.comell.edu. Qoth printing 10 9 8 7 6 5 4 3 2 1 Paperback printing 10 9 8 7 6 5 4 3 2
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Introduction: Money in International Affairs " One of the hallmarks of national sovereignty through the ages has been the right to create money .... The ability to create its own domestic money is the key financial distinction of a sovereign state. " I:<red Hirsch, Money International, 1969 Dow should we think about money in international affairs? Ask the proverbial man or woman in the street, and the answer will be straightforward. All currencies are national: One Nation/One Money. America has its dollar, the British their pound, Japan the yen, each money exclusive within its own sovereign domain. The geography of money coincides precisely with the political frontiers of nation-states. Even professionals who should know better, like the late Fred Hirsch, a noted international economist, share the One Nation/One Money myth. Economists in particular find it difficult to think of currency relations in anything other than traditional territorial terms. In the words of the research director of the Interna- tional Monetary Fund: "Virtually all of the world's nations assert and express their sovereign authority by maintaining a distinct national money and protecting its use within their respective jurisdictions. Money is like a flag; each country has to have its own" (Mussa 1995:98). The vice president ofthe Federal Reserve Bank of Boston concurs: "Currency independence rules the waves" (Fieleke 1992:17). In fact, nothing could be further from the truth. Currency use is by no means
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This note was uploaded on 11/29/2010 for the course IR 109 taught by Professor Heinz during the Spring '10 term at Rochester.

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reading # 10 - T HE G EOGRAPHY OFMONEY~ BEN.JAMIN . I. (...

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