Might an international monetary system that depends for its smooth operation on
the dominance of a hegemonic power be dynamically unstable? There are two
channels through which dynamic instability might operate: the system itself might
evolve in directions that attenuate the hegemon’s stabilizing capacity; or the system
might remain the same, but its operation might influence relative rates of economic
growth in such a way as to progressively reduce the economic power and, by
implication, the stabilizing capacity of the hegemon.