A new Bank for International Settlements paper chronicles the births and deaths of individual currencies throughout history. Researchers found that currency births are most commonly the result of political events like independence or conflict (36 percent), while deaths are driven by economic factors, primarily inflation (20 percent) and unit changes (35 percent). The study reveals that the average currency has a life expectancy of just 33 years, though those born from war or civil conflict die much sooner.
Despite America's relative youth as a nation, the US dollar stands out as the world's longest continuously used unit of account still in circulation. The paper also notes the challenges of tracking currency histories due to political name changes, using Yugoslavia as a key example of how country rebranding complicates monetary tracking. The authors constructed a database mapping currency births and deaths, showing that when one currency dies, another typically replaces it.
The research highlights how currencies serve as instruments of state power, yet remain surprisingly mortal over time. The authors' analysis provides insight into the frequency of monetary switches across different regions and political circumstances, inviting further examination of their detailed dataset.
Source: Financial Times Markets · Summarized by HeadlinesBriefing