2004-01 One world, one currency : exploring the issues

Along with globalization of trade and finance has come a certain globalization of money. Some countries have adopted monetary unions and currency boards; others increasingly use international currencies in place of national monies. This paper explores the idea, proposed by Keynes in 1944, of a global money –- framed here as a voluntary, representative arrangement based on accepted principles for optimal conduct of monetary policy. It is argued that, if the current pace of economic and financial integration continues, a global money may emerge that is better adapted to internationalization of production and exchange -- although such a change may be a long time in coming.