I don't think her mechanism of currency valuation changes could possibly work back when currency was just valuable metals and everyone used the same few types?
To re-use the example of Venice, they started out using Verona's currency, then introduced a more pure and heavier silver coin (the grosso), which was imitated by all their trading partners. And reliable imitation, in a commodity-currency world, means essentially equal value. The byzantine empire's basilikon was a 1-to-1 equivalent to the grosso. This only ended when it was massively devalued. Venice then introduced its gold ducat, which also was copied by all its trading partners (which at that point meant that large chunks of Europe had a local gold coin equivalent to the venetian ducat, which they also called a ducat).
Meanwhile most of the new world, including british colonies there, all standardized on the spanish silver dollar. The US dollar started its life as an exact equivalent.
And modern city states with good economic growth don't have free floating currencies either: Luxembourg's franc was 1-to-1 with the Belgian franc, until both got replaced by the Euro. Hong Kong has generally been pegged to the US dollar (except for a 10 year period after Nixon closed the gold window). Singapore has a floating currency, but their official policy is to maintain a relatively fixed (technically, very-slowly-appreciating) exchange rate against a basket of the currencies they trade against (https://www.mas.gov.sg/monetary-policy/Singapores-Monetary-Policy-Framework/faqs/section-2#S02.2). This means they're actively suppressing the currency-swings framework that Jacobs thinks to be so important.
The mechanism she suggests doesn't seem crazy to me, but none of the obvious candidates seems to have ever followed it.
I don't think her mechanism of currency valuation changes could possibly work back when currency was just valuable metals and everyone used the same few types?
To re-use the example of Venice, they started out using Verona's currency, then introduced a more pure and heavier silver coin (the grosso), which was imitated by all their trading partners. And reliable imitation, in a commodity-currency world, means essentially equal value. The byzantine empire's basilikon was a 1-to-1 equivalent to the grosso. This only ended when it was massively devalued. Venice then introduced its gold ducat, which also was copied by all its trading partners (which at that point meant that large chunks of Europe had a local gold coin equivalent to the venetian ducat, which they also called a ducat).
Meanwhile most of the new world, including british colonies there, all standardized on the spanish silver dollar. The US dollar started its life as an exact equivalent.
And modern city states with good economic growth don't have free floating currencies either: Luxembourg's franc was 1-to-1 with the Belgian franc, until both got replaced by the Euro. Hong Kong has generally been pegged to the US dollar (except for a 10 year period after Nixon closed the gold window). Singapore has a floating currency, but their official policy is to maintain a relatively fixed (technically, very-slowly-appreciating) exchange rate against a basket of the currencies they trade against (https://www.mas.gov.sg/monetary-policy/Singapores-Monetary-Policy-Framework/faqs/section-2#S02.2). This means they're actively suppressing the currency-swings framework that Jacobs thinks to be so important.
The mechanism she suggests doesn't seem crazy to me, but none of the obvious candidates seems to have ever followed it.