Did the Structure of Trade and Foreign Debt Affect Reserve Currency Composition?
Author InfoMariko Hatase (Director and Senior Economist, History Section, Institute for Monetary and Economic Studies, Bank of Japan (E-mail: mariko.hatase@boj.or.jp)) Mari Ohnuki (Associate Director and Economist, History Section, Institute for Monetary and Economic Studies, Bank of Japan (E-mail: mari. oonuki@boj.or.jp)) Abstract Historical experience is often invoked in the modern debate on competition among reserve currencies, yet little is known about quantitative aspects or institutional features of reserve management. By drawing on newly obtained data on foreign exchange reserves, especially those broken down by currency, this paper explores the competition between the British pound sterling and the U.S. dollar for the status of leading reserve currency in Japan during the interwar period. We find that competition between these two currencies remained undecided and that their relative status alternated repeatedly. Historical materials and the results of econometric analysis sugg
Author InfoMariko Hatase (Director and Senior Economist, History Section, Institute for Monetary and Economic Studies, Bank of Japan (E-mail: mariko.hatase@boj.or.jp)) Mari Ohnuki (Associate Director and Economist, History Section, Institute for Monetary and Economic Studies, Bank of Japan (E-mail: mari.oonuki@boj.or.jp)) Abstract Historical experience is often invoked in the modern debate on competition among reserve currencies, yet little is known about quantitative aspects or institutional features of reserve management. By drawing on newly obtained data on foreign exchange reserves, especially those broken down by currency, this paper explores the competition between the British pound sterling and the U.S. dollar for the status of leading reserve currency in Japan during the interwar period. We find that competition between these two currencies remained undecided and that their relative status alternated repeatedly. Historical materials and the results of econometric analysis sugge
