From 'static' gold to the floating dollar

In this paper we discuss some features of the balance of payments position of the country that issues the key currency under different international monetary standards. The analysis takes a Sraffian 'standpoint', where the monetary rate of interest of the central country is seen as an independent policy variable. The critical analysis of the theories and experiences of earlier standards helps us to understand the current 'floating dollar standard' in which the US economy becomes completely free of any balance of payments constraint. Copyright 2003, Oxford University Press.