The Future of Money

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Is globalization leading to fewer currencies and simpler monetary management? Many specialists believe so, as national governments' territorial monopolies over money seem to be diminishing. However, Benjamin Cohen argues against this "Contraction Contention," asserting that the number of currencies is likely to expand, complicating monetary governance. The book presents an innovative theoretical model to understand states' strategic preferences in monetary management, addressing whether governments should maintain traditional monetary sovereignty or pursue regional currency consolidation. This model offers two significant advancements: it highlights the three-dimensional nature of decision-making, rather than comparing just two options, and it emphasizes the degrees of currency regionalization as a key factor influencing state preferences. Cohen also examines the private sector's role as an alternative source of money. The book concludes with two essential policy proposals: first, to revive fiscal policy as a macroeconomic management tool to counteract the diminishing effectiveness of monetary policy; second, for the International Monetary Fund to play a more active role in coordinating decentralized government decision-making. While the future of money may be fraught with challenges, the book outlines alternative policies that can help avoid chaos.