The historical basis for the emergence of this theory was a change in the balance of power in the world in favor of the United States on the basis of increasing the uneven development of countries. After World War II, the United States took a dominant position in world production, international trade, and accumulated huge gold reserves. At the same time, the economies of most countries of Western Europe and Japan were undermined by the war, the positions of their currencies weakened, and gold and foreign exchange reserves decreased. The “dollar famine” reigned – a shortage of dollars in Western Europe and Japan. Key Currency Theory Representatives – US Economists J. Williams (author of this term, which appeared in 1945 year), A. Hansen, English economists R. Houtri, F. Graham, etc.
The essence of this theory is the desire to approve the three main tenets:
the division of currencies into key (dollar and pound sterling), solid (German brand, French franc, etc.) and soft, not playing an active role in international economic relations, is necessary and inevitable; the leading role of the dollar as opposed to gold, since they estimate the dollar is “not worse, but better than gold”; orientation of the monetary policy of all countries to the dollar and maintaining it as a reserve currency, even if it contradicts their national interests.
The theory of key currencies is the successor to the theory of regulated currency, which is manifested in the ideas of J. Keynes about creating a world currency system based on two regulated currencies – the pound sterling and the dollar.
The theory of key currencies reflects the policy of the hegemony of the dollar as opposed to gold. American economist F. Nussbaum called the dollar “another currency”, an outstanding currency that supplanted gold. H. Obrey argued that currency stabilization in the world depends on the dollar as the leading currency. A. Hansen advocated the dismantling of gold and the creation of a regulated world monetary system, which should be based on the dollar. This idea influenced the evolution of the global monetary system. The theory of key currencies was the rationale for the principles of the Bretton Woods system, which was based on gold and two reserve currencies, obliged IMF member countries to conduct currency intervention in order to maintain the dollar.
The crisis of the Bretton Woods system has revealed the failure of ideas about the superiority of the dollar over other currencies. The American currency turned out to be as unstable as other national non-exchange credit money. In the 60s of the 20th century, due to the weakening of US positions in the global economy, “dollar hunger” was replaced by “dollar satiation”, the weakening of the dollar’s position as a reserve currency began.