TY  - JOUR
AU  - Bordo,Michael
AU  - James,Harold
TI  - One World Money, Then and Now
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12189
PY  - 2006
Y2  - May 2006
UR  - http://www.nber.org/papers/w12189
L1  - http://www.nber.org/papers/w12189.pdf
N1  - Author contact info:
Michael D. Bordo
Department of Economics
Rutgers University
New Jersey Hall
75 Hamilton Street
New Brunswick, NJ 08901
Tel: 732/822-7152
Fax: 732/932-7416
E-Mail: bordo@econ.rutgers.edu

Harold James
History Department and Woodrow Wilson School
Princeton University
Princeton NJ 08544
E-Mail: hjames@princeton.edu
AB  - The case for monetary simplification and unification has been made since the middle of the nineteenth century. It rests on four principal arguments ;reduced transaction costs; establishing credibility; preventing bad policy in other states; political integration via money. In this paper we  argue that the case for monetary integration is becoming increasingly less persuasive. In making our case we posit a different concept of money to the one that underlay the nineteenth century discussions which we term "Newtonian" since it was based on the   assumption of a single reference  external to the state reflected in the definition of value in terms of precious metals. In the twentieth century, views of money have shifted  to a more " Einsteinian" or relativistic  conception.  Measures of value that  move relative to each other are helpful in terms of dealing with large shifts in relative prices that affect different countries very differently. In the current age of globalization, "Einsteinian"  money is capable of accommodating shifts that were politically destructive in the " Newtonian" world.
ER  -