Symposium: Currencies and International Order

[This is a post-publication review symposium]Does great-power politics shape international monetary decision-making? Susan Strange (1971) and Robert Gilpin (1987) certainly thought so. In recent years, however, International Political Economy (IPE) has turned increasingly to models inspired by economic drivers—ranging from market liquidity to global integration. In their new article, “No Reservations: International Order and Demand for the Renminbi as a Reserve Currency,” Steven Liao and Daniel McDowell reawaken this earlier tradition, turning the spotlight on China and the Renminbi. Their article finds that as states preferences diverge from the United State, they are more likely to hold Renminbi. Monetary policy, then, becomes part of a hedging strategy against American hegemony and possibly support for an alternative international order. The article nicely ties questions of monetary policy to important issues of great-power transitions. Given recent moves by the International Monetary Fund (IMF), which seem to place the Renminbi closer to reserve currency status, as well as the tumult in domestic Chinese monetary policy, this article speaks directly to events on the ground. [...]