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Economic Commentary

Competing Currencies: Back to the Future?

Sometimes, an emerging or rapidly changing currency experiences a period in which it competes with a second currency as a medium of exchange. The competing currencies are not like quarters and dollar bills, where the relative price is fixed, or like checks and dollar bills, where the unit of account is always the same. During an episode of dual currencies, prices are often denominated in each currency, and the relative price of an item fluctuates as the advantages offered by a particular currency change.

The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. This paper and its data are subject to revision; please visit clevelandfed.org for updates.

Suggested Citation

Craig, Ben R. 1996. “Competing Currencies: Back to the Future?” Federal Reserve Bank of Cleveland, Economic Commentary 10/15/1996.