2/ As I understand it, his basic argument is that there is a conflict of interest between the short-term domestic interests and long-term international objectives of a country currency being used as a world reserve currency
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3/ I didn't fully grok what the precise conflict of interest between short-term domestic and long-term international objectives was in Nash's view. I assume from this text it's basically about gov's ability to inflate away wealth.pic.twitter.com/ziVGNremOT
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4/ In the wake of the 2008 financial crisis of, the governor of the People's Bank of China explicitly named the reserve currency status of the US dollar as a contributing factor to global savings and investment imbalances that led to the crisis.
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5/ Nash's idea was that we should have some form of ideal money which was not under a single political entity's control
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6/ Gold was one option but unattractive for a few reasons:pic.twitter.com/DEeiw5jniS
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7/ Nash came up with idea of ICPI - Industrial Consumption Price Index which would be made up of a basket of "optimally chosen commodities."
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8/ The tricky bit was that the goods in the basket would have to be adjusted over time which reintroduces a political component that was the whole problem in the first place.
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9/ More recently, Nash is getting a lot of play because Bitcoin has a lot of the properties of ideal money and "hyperbitcoinization" seems similar to Nashificationpic.twitter.com/Ne8zlmMUAl
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10/ Another interesting observation that has me thinking is whether Keynsiasm is inherernly authorian high modernist?pic.twitter.com/TOZhzuaJlZ
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11/ This is all from the Wikipedia page (https://en.wikipedia.org/wiki/Ideal_money …) and a lecture (http://personal.psu.edu/gjb6/nash/money.pdf …). Would love suggestions for further reading!
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Mundell-Fleming seems relevant https://en.m.wikipedia.org/wiki/Mundell–Fleming_model …
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