What does the international currency system really look like?

There has been a lot of debate lately about the shape of the international currency system. Increasingly, we are told, the world is moving toward a multicurrency system with several poles, implying that the system is becoming more competitive. Polarity, however, is a notoriously crude measure of the level of competition in any kind of system, economic or political. If analysis is to be at all accurate, it should take into account not only the number of poles in a system but also the inequalities among them - an alternative approach encompassed by the concept of concentration. In this paper we make use of the concept of concentration to provide a more accurate picture of the competitive structure of the currency system today. When taking account of concentration as well as polarity, our results suggest that the competitive structure of the system is little changed over a period stretching back more than two decades.