Global Imbalances and the Key Currency Regime: The Case for a Commodity Reserve Currency

Abstract

This paper considers Kaldor's 1964 proposal for a commodity reserve currency (CRC) as a serious alternative to the current system, which has the US dollar as the world reserve currency. It argues that the reserve-currency status of the US dollar helped to create global imbalances and financial fragility pre-empting the current crisis. The primary goal of the CRC was to resolve the 1960 Triffin dilemma, which remains a problem today. Following a brief history of alternative monetary reform proposals, the CRC is outlined. Backed by a basket of 30 or so commodities, the CRC would fix their price index in terms of the international reserve and reduce the disorderly swings in individual commodity prices. Sovereign governments would be free to fix or float their national currencies to the CRC. With growing fears over global warming and national resource security, particularly in the world's poorest countries, the introduction of a CRC could reduce supply constraints, stabilize costs of production, promote global effective demand from the periphery and balance growth between periphery and core countries.

The Nexus between Monetary Policy, Banking Market Structure and Bank Risk Taking

“…This paper expands on the various proposals that recently have been presented Usshner, 2009;Strauss-Kahn, 2009;, Camdessus a.o., 2011;. Before discussing the various systems and recent proposals, however, we need a closer look into the issue of intrinsic value.…”

“…In recent years, calls are regularly heard for the establishment of a new global currency standard Usshner, 2009;Strauss-Kahn, 2009;, Camdessus a.o., 2011. In this article we will try to sketch the contours of a new system.…”

Important contributions of the Cambridge Equation to the role of political economy: from Pasinetti to our days

“…The fi rst kaldorian extension with the monetary policy was presented by Dalziel (1991). The money face has been the centre of the discussion in publications like Ussher (2009), Araujo and Teixeira (2010), Rubio & Carrasco-Gallego (2016), King (2016), Marcuzzo (2017), Colacchio & Davanzati (2017), Chandra (2019), and others, trying to explain the behaviour of this kind of policy in a long-run perspective based on kaldorian's proposes. The relevance of the theme tends to be less important to the Post-Keynesian based in the Pasinetti Theorem.…”

International monetary policy with commodity buffer stocks

“…Various economists from the twentieth century, such as Goudriaan (1932), Frank Graham (1941, Keynes (1942Keynes ( [1974), Hayek (1943), Benjamin Graham (1944), Kahn (see Rosselli 2012), Harrod (1963), Hart et al (1964), Kaldor (1970), Hart (1976), Rweyemamu (1980), and more recently Lietaer (2004) and Ussher (2009), all advocate an international reserve currency (SDR) to be issued against the deposit of warehouse receipts for commodities constituting one or more commodity units (for a review of the main plans, see Ussher 2011). 6 This real bills doctrine at the international level would offer new international reserve currency with a solid backing, redeemability, and a countercyclical supply.…”