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By this time the dollar was having its own set of balance of payments and currency problems, but that is for the
next installment of this series when I turn to the United States and China.
[1] We show where key indicators were relative to their history by averaging them across the cases. The chart is
shown such that a value of “1” represents the peak in that indicator relative to history and “0” represents the
trough. The timeline is shown in years with “0” representing roughly when the country was at its peak (i.e., when
the average across gauges was at its peak). In the rest of this section, we walk through each of the stages of the
archetype in more detail. While the charts show the countries that produced global reserve currencies, we’ll also
heavily reference China, which was a dominant empire for centuries, though it never established a reserve
currency.
[2] A good example of this is the popularity of the Patriot movement in the Netherlands around this time:
Encyclopedia Britannica, The Patriot movement, https://www.britannica.com/place/Netherlands/The-18th-
century#ref414139
[3] While most people think that the ascent of the US came after World War II, it really started here and went on
across both wars—and the seeds of that rise came still earlier from the self-reinforcing upswings in US education,
innovation, competitiveness, and economic outcomes over the 19th century.
[4] Rough estimate based on internal calculations
[5] Rough estimate based on internal calculations
[6] Rough estimate based on internal calculations
[7] In this piece, when talking about “the guilder,” we generally refer to guilder bank notes, which were used at the
Bank of Amsterdam, rather than the physical coin (also called “guilder”).
[8] Encyclopedia Britannica, Eighty Years’ War, https://www.britannica.com/event/Eighty-Years-War
[9] Encyclopedia Britannica, The Anglo-Dutch Wars, https://www.britannica.com/event/Anglo-Dutch-Wars
[10] Israel, Dutch Primacy in World Trade, 1585-1740, 219
[11] Encyclopedia Britannica, The Anglo-Dutch Wars, https://www.britannica.com/event/Anglo-Dutch-Wars
[12] Encyclopedia Britannica, The Dutch War, https://www.britannica.com/event/Dutch-War
[13] Israel, The Dutch Republic: Its Rise, Greatness, and Fall 1477-1806, 824-825
[14] Encyclopedia Britannica, The Anglo-Dutch Wars, https://www.britannica.com/event/Anglo-Dutch-Wars
[15] There was a general rise in foreign investment by the Dutch during this period. Investments in UK assets
offered high real returns. Examples include Dutch purchases of stocks in the British East India Company, and the
City of London selling term annuities (bonds) to Dutch investors. For a further description, see Hart, Jonker, and
van Zanden, A Financial History of the Netherlands, 56-58.
[16] Hart, Jonker, and van Zanden, A Financial History of the Netherlands, 20-21
[17] Quinn & Roberds, “Death of a Reserve Currency,” 13
[18] Encyclopedia Britannica, The Anglo-Dutch Wars, https://www.britannica.com/event/Anglo-Dutch-Wars
[19] Encyclopedia Britannica, The Anglo-Dutch Wars, https://www.britannica.com/event/Anglo-Dutch-Wars
[20] Encyclopedia Britannica, The Anglo-Dutch Wars, https://www.britannica.com/event/Anglo-Dutch-Wars