Monetary hegemony is an economic and political phenomenon in which a single state has decisive influence over the functions of the international monetary system. The functions influenced by a monetary hegemon are:
- accessibility to international credits,
- foreign exchange markets
- the management of balance of payments problems in which the hegemon operates under no balance of payments constraint.
- the direct (and absolute) power to enforce a unit of account in which economic calculations are made in the world economy.
The term Monetary Hegemony appeared in Michael Hudson's Super Imperalism, which was first published in 1972. Monetary Hegemony describes not only the asymmetrical relationship that the US dollar has to the global economy, but the strictures of this hegemonic edifice that support it, namely the International Monetary Fund and the World Bank. The US dollar continues to underpin the world economy and is the key currency for medium of international exchange, unit of account (e.g. pricing of oil), and unit of storage (e.g. treasury bills and bonds) and, despite arguments to the contrary, is not in a state of hegemonic decline (cf. Fields & Vernengo, 2011, 2012).
The international monetary system has borne witness to two monetary hegemons: Britain and the United States.
... The end of World War II witnessed the recentralization of monetary power in the hands of a United States that had become willing to carry the burden of postwar reconstruction ... British compliance to create its postwar monetary system through financial leverage, namely the Anglo-American Financial Agreement of 1945 ... real multilateral world as the Bretton Woods monetary system came into effect in 1958 ...
Famous quotes containing the words hegemony and/or monetary:
“The authors hegemony must be broken. It is impossible to go too far in fanatical self-denial or fanatical self-renunciation: I am not I, but rather the street, the streetlights, this or that occurrence, nothing more. Thats what I call the style of stone.”
—Alfred Döblin (18781957)
“In our time, the curse is monetary illiteracy, just as inability to read plain print was the curse of earlier centuries.”
—Ezra Pound (18851972)