Title: Currency Power in Transition: Commodity Trade and the Politics of Global Currency Hierarchies

Abstract: How do structural shifts in global production and trade reconfigure international currency hierarchies? As global reliance on oil plateaus and trade in critical minerals and renewable-energy value chains expands, the structure of commodity trade is transforming the foundations of international monetary power. We develop a dynamic political economy model in which currency power emerges from the interaction of firms, governments, and investors within this evolving system. Governments build monetary and financial infrastructure that supports settlement in strategic commodities; firms choose invoice currencies to minimize transaction costs tied to sourcing and processing; and investors allocate portfolios based on stability and global usage. These linked choices create feedback loops through which shifts in commodity trade networks alter the hierarchy of international currencies. Strategic complementarities among actors generate threshold effects: once trade and finance become dense around a given currency, its use across exchange, valuation, and reserve functions can expand rapidly. The model is evaluated through a forward-looking simulation calibrated to contemporary parameters — in particular, China’s dominance in critical minerals and renewable-energy manufacturing — and suggests a future economic shock could amplify renminbi internationalization and erode dollar centrality. The findings reveal how the green transition links structural change in commodity trade to the evolution of global currency power.

Speaker: Dr. Ryan Weldzius, Villanova University

Dr. Ryan Weldzius is an Assistant Professor in the Department of Political Science at Villanova University. His primary research agenda is on the distributional consequences of economic interdependence and the constraints this places on the policies of states. He received his Ph.D. in Political Science from the University of California, Los Angeles, M.Sc. in Economics and Management Science from Humboldt-Universität zu Berlin, M.A. in Politics from New York University, and B.A. in Political Science from DePaul University. He has held research appointments at the World Trade Organization, Washington University in St. Louis, and the Niehaus Center for Globalization and Governance at Princeton University. 

The KU Trade War Lab (TWL) supports funded research, offers student research training, and enables campus outreach on the political economy of trade and conflict. To view current projects and upcoming events, please visit: https://sites.google.com/view/jackzhang/twl