thanks, Joscha - and thanks for spotting the mistake in the stylised CEX balance sheet!

perhaps of interest to @danielagabor.bsky.social @steffenmurau.bsky.social @jvtk.bsky.social @adamtooze.bsky.social @stefeich.bsky.social @kaikodden.bsky.social @benbraun.bsky.social @jwullweber.bsky.social @matthiasthiemann.bsky.social, Michel Aglietta, Satoshi Nakamoto, and F.A. Hayek

For now, I am very excited to share this product of almost 4 years of work, and grateful to Romain, Jeff, @andreabinder.bsky.social and many others who have been intellectual and personal companions throughout!

We need much more research to establish the direction(s) of causality, identify interactions, and understand the structures, histories and monetary institutions (e.g. offshore finance) that affect resource flows (and vice versa). Do get in touch if you are interested!

If any meaningful global sustainability transition requires limiting resource transfers (#carbonleakage etc.), this in turn requires structural changes to the global monetary system. On the flipside,  changes in the global currency order  mean changes in global resource flows.

In the paper, I use some simple regression models to test these hypotheses, control for additional factors, and rule out alternative explanations. In short, it looks a lot like currency hierarchy is causally linked to asymmetric resource transfers. But what does that imply?

Moreover, lower price levels in the South also directly cause ecologically unequal exchange. My new interpretation of the 'exorbitant privilege' explains how this asymmetry too might be a consequence of currency hierarchy.

In short, interest rates are higher for lower-ranking currencies. It looks like higher rates in the South nurture extractivism, hamper industrial upgrading, create various dependencies ('financial subordination’), and drive net resource outflows!

What if currency hierarchies and ecologically unequal exchange are causally linked? @RomainSvartzman & Jeff Althouse suggested this (www.tandfonline.com/doi/pdf/10.1...). My article builds on their idea by specifying, formalizing and testing causal hypotheses.

However, we also know that the structure of the global monetary system is characterized by a 'currency hierarchy': Countries that issue internationally acceptable currencies have relatively lower interest rates and higher price levels - again, a dollar 'costs' less!

What we knew relatively little about is why these asymmetries persist, i.e. why prices and exchange rates do not adjust to equilibrate the differences in factor costs and productivity (as mainstream economics would predict).

We know that Global North countries import more biophysical resources (land, energy, labour, ...) from the South than vice versa. This is because the North gets more money per exported resource, i.e. a dollar 'costs' fewer resources (s/o @kendricklamar: youtu.be/y8kEiL81_R4?...)

@andreabinder.bsky.social