“Real Artists Ship”

Colin Johnson’s blog


Rates of Exchange

Current talk about the Euro makes me wonder about what will happen to the notion of a country belonging to a currency system in the next century or two. At present, we see a change in the currency system as being a huge shift—something that might happen at some point as part of a long-term political realignment, as with the introduction of the Euro, but which we wouldn’t imagine happening again in our lifetimes.

I wonder if, in the longer run, we will see a much more flexible approach to this. If currency becomes much less dependent on physical notes and coins, it becomes much easier for a government to swap out into a different currency system. Perhaps this might be something that is done regularly as part of economic planning: a number of worldwide currency systems could exist, with various criteria for entry, and countries enter and leave these systems according to their economic status and planning, and have the option of returning to a local currency for a while if none of these international systems work for them at that point.

Is this plausible? I don’t know enough economics to know whether this is at all a meaningful proposition.

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