Macro-Finance Salon (No.132): International Currencies in History

2019-11-19 IMI

On the afternoon of November 19, the Macro-Finance Salon (No. 132) was held in Renmin University of China. Georges Depeyrot, director of the research department of National Center of Scientific Research in France, delivered a speech on the topic "International Currencies in History". Professor He Ping and associate professor Luo Yu from School of Finance of RUC attended the salon and made comments. The meeting was presided over by Professor He Ping. Professor Georges Depeyrot divided the third century B.C. to the 18th century A.D. into four periods, talked about the main international currencies in each period, and analyzed the reasons why the sovereign state of the currency won the currency war. Historically, several countries, including Rome and Greece, Byzantium and Islam, Italy and Spain, have experienced different currency wars. In this process, international trade developed from currency to IOU, and public banks emerged. History gives us an experience: there is a major currency in each stage, but it will inevitably decline gradually. After the fixed system is broken, a new currency will appear. And behind this is states’ power. After the 17^th century, the development of modern financial market and the emergence of various financial instruments made the cost of currency conversion lower, and the international currency was thus more in line with the interests of investors. As the Bretton Woods system collapsed, US dollar did not stand firm as the top international currency, and more of its competitors emerged. The future international currency is likely to be composed of US dollar, euro and RMB.

After the keynote speech came the discussion session. Associate professor Luo Yu summed up the main points that professor Georges Depeyrot said, and put forward opinions on the future trend of currency competition. One of the main problems facing euro is that there is no unified national concept behind it, and the lack of unified fiscal policy restricts its further development. With the emergence of digital currency, the development of international currency might evolve into the competition between mainstream currency and alternative ones.

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Macro-Finance Salon (No.132): International Currencies in History

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