K. Matsuyama, N. Kiyotaki and A. Matsui, “Toward a Theory of International Currency,” Review of Economic Studies, Vol. 60, No. 2, 1993, pp. 283-307. doi:10.2307/2298058
has been cited by the following article:
TITLE: How a Key Currency Functions as an International Liquidity Provision and Insurance System
AUTHORS: Masayuki Otaki
KEYWORDS: Key Currency as an Insurance System; Rents from Issuing a Key Currency; International Liquidity; Sovereign Risk
JOURNAL NAME: Theoretical Economics Letters, Vol.3 No.1, February 26, 2013
ABSTRACT: Although some previous studies assert that the selection of a key currency is a kind of hysteresis dominated by contingencies, historical evidence suggests that this selection depends on the following two plausible and inevitable economic factors that this study examines: overwhelming industrial power and the possession of huge amounts of foreign assets and gold. Based on the fulfillment of these economic factors, the key-currency country receives rents in return for bearing the sovereign risk and supplying sufficient liquidity to the countries within its network that accept its currency. Thus, the key-currency system can be regarded as an international liquidity provision and insurance system that relies on the economic power of the key-currency country.