The unique-global currency is an issue of post-gold and post Bretton Woods-US dollar standards of the international money topic -- some scholars improperly call the last ‘international monetary system’ (IMS) and that would be for more semantic debate that I prefer to skip here.

Or, this topic briefly develops like the following. The international gold standard (some claim it for having started in 1818, when Bank of England declared it for its own monetary system; others say that it would have started sometime around 1870 or 1890, together with the international economy and industrial revolution; but all agree that it ended by the big crisis, in 1929-1933). Gold Standard has been an ‘international monetary system’(IMS) according to the Robert Triffin’s rules, as:

(A) Restricted: (1) a unique basic inflexible value (that gold was able to represent) and (2) external balance of payments’ (EBP’s) mechanism of remaking equilibrium for all national (individual) economies (countries, in the international economic area).

(B) Extended: the above (A), plus: (3) fixed exchange rates, as (a) functioning (system); (4) a rule of international law that engages States in supporting the IMS in place (that is partly arguable for the gold standard, but OK for the Breetton Woods Agreement (1944-1971).

As wiped out by the crisis (see UK 1931, US 1933, France 1933 etc. that openly and definitively given up the gold convertibility of their currencies), gold standard was followed by the so-called ‘international monetary disorder’ (1931-1944) with:

• exchange rates uncontrolled floating;

• no automatic EPBs’ remaking equilibria;

• volatility of all money signs (currencies) and price inflation;

• national bias for exports and against imports (the ‘economic world war’),

so that, shortly, non-IMS was automatically equaling the international monetary disorder and States politically concluded for the need of remaking IMS upon the above rules. Then, the Bretton Woods Agreement that came in 1944 was complying with the above (A) and (B) rules, certainly except for: (1’) there was the US$, instead of gold, and (3) fixed exchange rate was hundred percent remade, but on a different base.

Then, this IMS lasted to 1971, when it was not the Agreement itself, but its basics that dropped out as obsolete. Shortly, the basic problem of this IMS was replacing a ‘neutral’ basic value (that the gold metal was) by a national currency, that was seeing itself forced to evolve in the international area where it was and is never ‘neutral’ at all.

Then, when the Bretton Woods IMS got bankrupted, a whole intellectual movement to remake the IMS (as similarly to the way that Bretton Woods had previously replaced the gold standard) has started for at least one and a half decades (during seventies and eighties), and many ideas here arisen – or, Your question belongs to this zone of economics.

A “unique global currency” is (just) one of these. Or:

• as ‘representative’ money, what can come up here, except gold (to come back), that had already got bankrupted ?

• as ‘fiat’ money, an international bank or currency management institution would be needed, but just look at the Euro common country case, for just a restricted and economically developed region, and try to figure out the issue as extended to the world-wide scale – and that since the previous Bretton Woods IMS was becoming ‘aggressive’ at its time to be imposed to all States;

• plus, as ‘fiat money’, as well, a presumable global currency will be assumed to comprise an international price system that is not existing out of regional and strong national economies, like the one of the US;

• plus, that international bank is assumed to be as politically strong as no State could agree with,

and even more than all these above.

Just here adding that no theory of the seventies-eighties international money proven acceptable and the international money came to be marked by completely different events -- e.g. a “La Platza-Louvre”(New York) international agreement (1985) that was quite a success for mostly reducing the US$ floating on international markets thanks’ to some big banks’, including national banks’ interventions. That event could prove that floating – the symptom of the international monetary disorder – could be fought and, more than that, finally:

/ there can be some international monetary order even in the absence of the conceptual IMS and its rules and rigueur;

/ just no need for too much remaking the international monetary order on so genuine and intellectual scenarios;

/ plus, even the Bretton Woods IMS could now be seen as an ‘extremely crisis’ (i.e. just after the World War) monetary rule that might be supposed to leave the place for a more liberal and ‘laisser-faire’ monetary area;

/ plus, in my view, the former IMS (Triffin) theory encounters a serious retort of another monetary theory, that is the one of Robet Mundell and Ronald McKinnon (i.e. the “optimum currency area” one).

In a world and for a debate that keeps by far unfinished here, we might admit living in an international monetary crisis type environment at present – as judging on some thirties’, fourties’ or seventies’-eighties’ basics of scholar judgment – but this crisis might be a little different than what was when gold standard or the Bretton Woods IMS got bankrupted one after another: it does not seem to be the end of the world.

And let me just add up my book reference, “Money and Market in the Economy of All Times” (Xlibris.co, March, 2011/ Liviu C. Andrei), that you can find long debate an history in. Yours, faithfully Liviu C. Andrei

At this time, apparently currency exchange rate can be used as a buffer to absorb some financial shocks. So, i find the global currency unlikely to happen unless a high level of convergence between economic systems is achieved. Taking into account the Greece-Euro-Zone situation, it is unlikely less evolved economies can keep up while having the same currency as strong ones.

Also, exchange rates are a good self-defense mechanism of national economic systems in terms of trade imbalances.

So, i conclude, that as long as we have national economies and polices, a single currency is unlikely to be feasible.

This is not a definitive answer, as if a single, scarce resource, may become a worldwide common economic development condition, it may become the reference base for all economies, thus facilitating the existence and need for a single currency. Such a future is possible, and oil may become that resource in long term if new technologies in energy generation do not develop fast enough to replace-it.

@Ruturaj Baber,

your comment will be greatly appreciated if will come with an argument that can stand. Why? I am not saying it is possible. We, here on ResearchGate (RG), are not trying to find solutions for "today". Yes , we can "day dream", why not.

The greatest ideas come form accidental findings, from day / nigh dreams, from NEED. The very need produces inventions, policy, rules, regulations, laws. You need, my need, their need... all together creates "Ours" !

So... Let's listen what is your argument. OK, not today, not tomorrow... why. if after tomorrow, then... HOW ? Thanks in the name of RG members, if I may :-)

Regards,

Adrian TW

I believe that we need to create a took kit of possible tools to stabilize and improve the global economic architecture. So in strong agreement with Adrian, dreams are essential. It is within academia that such dreams can be proposed, nutured, tested, survive or die. I don't think we have yet reached that moment that a single currency is politically viable, however I do believe it is our future, and while many others don't, I hope we can all agree that it is a tool that should be studied - along with the other tools that we might someday use.

My proposal for a single commodity reserve currency harks back to three authors: Keynes, Graham and Kaldor. John Maynard Keynes’s original Bretton Woods proposal for an International Clearing Union (ICU) that would issue a new international reserve currency by fiat called Bancor, was to resolve global imbalances. Among other social functions, the ICU would finance commodity stockpiles to stabilize individual commodity prices and thereby create a counter cyclical international incomes policy to smooth the world business cycle. Benjamin Graham expanded on this idea at Bretton Woods and proposed that they also create a new international currency (in addition to Bancor and Gold) that would be fully backed by buffer stocks of raw materials in fixed proportion to world production and trade. By targeting a commodity index Graham’s plan offered counter cyclical monetary policy: supply of the international reserve issued by an international commodity corporation (ICC) or central bank would using open market operations to relieve balance of payment constraints and potentially stabilize world demand and the price of wholesale goods. Nicholas Kaldor revitalized the Graham proposal for international monetary reform and a commodity reserve currency (CRC) in 1964. Like Keynes he was trying to avoid a

gold or dollar standard and find a solution to global imbalances, cost-push inflation and world inequality. He argued that a CRC would anchor real exchange rates, promote trade, allow nations to have independent employment and credit policies, and provide the natural resource security necessary for equitable robust growth and world peace. At the time of their authorship all three proposals were not politically viable. The West was not at a point where it was going to hand any amount of power over to the developing world (i.e. those who depended on commodity production the most) when it could reap the benefits of colonial and post colonial supply chains and (at times) a seemingly unlimited supply of cheap natural resources. In 1943 Keynes was himself was supportive of a CRC but believed it was for future implementation "once men’s minds were trained for such advances." In 1972 Kaldor thought that

the commodity reserve currency was still 20 years ahead of its time. I think Kaldor was probably 50 years off.

Just to clarify, a new international commodity reserve currency that would replace the USD as the world's currency does not remove the sovereignty of any country to have their own currency and exchange rate policy. It only offers a benchmark or portfolio value. And unlike today where the hoarding of money (global surpluses) can reduce the chain of demand for goods and constrain international trade, production and employment, a hoarding of CRC will continue to maintain production (in commodities) and maintain the income stream attached, feeding back into demand for international trade.

There was a UGC, namely gold (Au). The US $ was backed by gold at the rate of $35/Troy oz. until the Nixon administration, but US citizens could not redeem their dollars or own significant amounts of gold. Gold is now trading at about $1700/Troy oz. and we US serfs now can buy all we want. Governments do not like gold because they cannot create it out of thin air. The eurozone is under stress because the ECB will not "print" enough euros to cover every governement's deficits. The US has been running $10^12 (trillion) annual deficits, but the Fed is trying to keep inflation at 2%/year. So if the USA and the eurozone cannot support stable monetary systems, what hope is there for the rest of the world? Maybe China, which is encouraging its citzens to accumulate gold, is the one exception (Marx is spinning in his grave at about 1000RPM).

A private new commodity reserve currency can be created as long as it is independently audited. In the commodity reserve proposal, each currency unit is backed by a basket of commodities (spot or even future contracts). This is similar to a commodity ETF, but backed by 100% reserves (a stock pile of commodities). A private stockpile or bufferstock would serve one purposes, offer redemption of the currency (or inventory receipt) into the basket of commodities if desired. This currency does not require common usage to be valued, since the commodities underlying it are traded in much higher volumes in world production and trade. So there does not need to be a political decision to adopt this currency for it to exist. It just needs to be more useful than the current valuation of trade into USD, and the stock piling of assets into USD denominated sovereign funds. If it did become widely used, then it would become an international reserve.

Countries could continue to print their own currency, and the market would decide on its exchange rate with the reserve currency.

I know I am straying from the original question of a unique global currency. If this latter idea is to propose a truly single currency - which Volker and Mundell has been known to support - I would agree with Baber that politically this is not viable and not even desirable due to the same problems that we currently see with Greece today.

The unique-global currency is an issue of post-gold and post Bretton Woods-US dollar standards of the international money topic -- some scholars improperly call the last ‘international monetary system’ (IMS) and that would be for more semantic debate that I prefer to skip here.

Or, this topic briefly develops like the following. The international gold standard (some claim it for having started in 1818, when Bank of England declared it for its own monetary system; others say that it would have started sometime around 1870 or 1890, together with the international economy and industrial revolution; but all agree that it ended by the big crisis, in 1929-1933). Gold Standard has been an ‘international monetary system’(IMS) according to the Robert Triffin’s rules, as:

(A) Restricted: (1) a unique basic inflexible value (that gold was able to represent) and (2) external balance of payments’ (EBP’s) mechanism of remaking equilibrium for all national (individual) economies (countries, in the international economic area).

(B) Extended: the above (A), plus: (3) fixed exchange rates, as (a) functioning (system); (4) a rule of international law that engages States in supporting the IMS in place (that is partly arguable for the gold standard, but OK for the Breetton Woods Agreement (1944-1971).

As wiped out by the crisis (see UK 1931, US 1933, France 1933 etc. that openly and definitively given up the gold convertibility of their currencies), gold standard was followed by the so-called ‘international monetary disorder’ (1931-1944) with:

• exchange rates uncontrolled floating;

• no automatic EPBs’ remaking equilibria;

• volatility of all money signs (currencies) and price inflation;

• national bias for exports and against imports (the ‘economic world war’),

so that, shortly, non-IMS was automatically equaling the international monetary disorder and States politically concluded for the need of remaking IMS upon the above rules. Then, the Bretton Woods Agreement that came in 1944 was complying with the above (A) and (B) rules, certainly except for: (1’) there was the US$, instead of gold, and (3) fixed exchange rate was hundred percent remade, but on a different base.

Then, this IMS lasted to 1971, when it was not the Agreement itself, but its basics that dropped out as obsolete. Shortly, the basic problem of this IMS was replacing a ‘neutral’ basic value (that the gold metal was) by a national currency, that was seeing itself forced to evolve in the international area where it was and is never ‘neutral’ at all.

Then, when the Bretton Woods IMS got bankrupted, a whole intellectual movement to remake the IMS (as similarly to the way that Bretton Woods had previously replaced the gold standard) has started for at least one and a half decades (during seventies and eighties), and many ideas here arisen – or, Your question belongs to this zone of economics.

A “unique global currency” is (just) one of these. Or:

• as ‘representative’ money, what can come up here, except gold (to come back), that had already got bankrupted ?

• as ‘fiat’ money, an international bank or currency management institution would be needed, but just look at the Euro common country case, for just a restricted and economically developed region, and try to figure out the issue as extended to the world-wide scale – and that since the previous Bretton Woods IMS was becoming ‘aggressive’ at its time to be imposed to all States;

• plus, as ‘fiat money’, as well, a presumable global currency will be assumed to comprise an international price system that is not existing out of regional and strong national economies, like the one of the US;

• plus, that international bank is assumed to be as politically strong as no State could agree with,

and even more than all these above.

Just here adding that no theory of the seventies-eighties international money proven acceptable and the international money came to be marked by completely different events -- e.g. a “La Platza-Louvre”(New York) international agreement (1985) that was quite a success for mostly reducing the US$ floating on international markets thanks’ to some big banks’, including national banks’ interventions. That event could prove that floating – the symptom of the international monetary disorder – could be fought and, more than that, finally:

/ there can be some international monetary order even in the absence of the conceptual IMS and its rules and rigueur;

/ just no need for too much remaking the international monetary order on so genuine and intellectual scenarios;

/ plus, even the Bretton Woods IMS could now be seen as an ‘extremely crisis’ (i.e. just after the World War) monetary rule that might be supposed to leave the place for a more liberal and ‘laisser-faire’ monetary area;

/ plus, in my view, the former IMS (Triffin) theory encounters a serious retort of another monetary theory, that is the one of Robet Mundell and Ronald McKinnon (i.e. the “optimum currency area” one).

In a world and for a debate that keeps by far unfinished here, we might admit living in an international monetary crisis type environment at present – as judging on some thirties’, fourties’ or seventies’-eighties’ basics of scholar judgment – but this crisis might be a little different than what was when gold standard or the Bretton Woods IMS got bankrupted one after another: it does not seem to be the end of the world.

And let me just add up my book reference, “Money and Market in the Economy of All Times” (Xlibris.co, March, 2011/ Liviu C. Andrei), that you can find long debate an history in. Yours, faithfully Liviu C. Andrei

Dear Adrian-Toader Williams,

Back to your question, I believe there is one more issue to emphasize, in context, the one of flexible, up to floating exchange rate of currencies. This was previously the symptom of the international money disorder and the international monetary systems (IMSs) based on representative money (see gold metal based money) were coming to fight it.

Or, later on and today, when fiat money came back up and dominates the representative money, that old fashion IMS stopped being able to do the same against floating disorder for some reasons, but especially for a principle one: all money signs (currencies) need their “freedom” of floating in order to adjust to domestic prices they reflect, prices that are permanently adjusting themselves. When fiat money, the exchange rate is one of individual prices in the domestic (home) area, whereas when representative metal money the same exchange rate was “obeying” to money metal parity – that was why it is to talk about two kinds of exchange rates with different functioning motors.

That is why floating did become more suitable than fixed exchange rates and the last stop being able to provide the (former) international money order of gold standard and Bretton Woods Agreement. And that is why radical changes in this (international money) area look no longer too much available or ready to be managed.

Liviu C. Andrei

Conversely with Bradut's mention, de facto, there already is a world currency: The Petroleum Equivalent Tonne: a measure of energy quantity. Not so obvious: some scientist also suggested the litre of Hydrogen peroxyde, as it is a compound easily convertible into a wide variety of other chemicals.

Agree with Bradut & Baber, not a good idea. The former gold standard, which only included the U.S. from 1900 to 1933, led quickly to a worldwide depression and WWII. Morrison's mention of the failing Euro is apt. If Greece had its own currency and devalued, the bond holders would get what they deserved for not doing due diligence, and the Greeks would all get pay cuts without the obnoxious formality of passing legislation, and soon they would be working double time to produce exports and the country would be OK.

Petroleum (or any commodity) is a poor choice of currency. Cracking has created enough new petroleum reserves to possibly drive us right over the edge of global warming. The price of it has never been stable.

Productivity controls prices. If the money supply doesn't adapt, trouble of one sort of another ensues. Countries will not be equal in productivity, so floating currencies are essential. The world has been far more stable since 1971 than before. That is not to say we don't have some outstanding problems. The chief among them is how to keep people employed while productivity rampantly increases. For quantitative analysis see https://www.researchgate.net/publication/258255561_Mechanism_for_extended_inversion_in_the_equity_premium?ev=prf_pub

In early 70ies, after the international monetary system (IMS) drawn by the Bretton-Woods (1944) international conference was out, there was a large number of scholars and specialists in a motion of remaking IMS / replace the one that had been. There came out many proposals as such, among which the ‘international standard of value’ (as etalon, in your translation) related ones were just one line; the same for UCG. It was just the reality responding to all these: no reaction; all such proposals were in vain.  No more IMS experience, as previously accounting the one of Bretton Woods (1944-1971) or, previously than that, the Gold Standard (1880-1931). On the contrary, in end 70ies the European Monetary System (EMS) was founded, but professor McKinnon thought  it was the same as the Bretton Woods’ creation – plus, it was given up for the forthcoming common currency in the EU, in 1999.

But significant is, I say, that the early 70ies time was much more appropriate to such fantasies of money designing, than it is today. I rather believe that money keeps  a long and dramatic historical experience already. We might just be satisfied when it is stable value and prices