Cross-Credit-Cycle Purchasing-Power Deviation, 1960-2024: Measurement and Its Limits

Abstract. Long-dated contracts denominated in a sovereign unit carry an unpriced term: the drift of that unit's purchasing power. This paper measures the drift for the US dollar and for a candidate non-sovereign unit that is defined but never adopted, using the World Bank's monthly commodity price panel from 1960 to 2024 and pooled seven-to-ten-year windows. The median cross-cycle purchasing-power deviation is 19.21% for the dollar against 5.22% for the candidate unit, a gap of 13.99 percentage points; the same ranking holds against sterling and the euro. Five measurement bases are reported separately and never combined. The paper then reports what the design cannot support: the gap is a property of the divisor's drift rather than of the two units' variability; on the median absolute forecast error the dollar's advantage disappears; short-horizon volatility shows no detectable difference; and a placebo exercise over 1,000 randomly constructed anchors places the candidate unit at the top of the dispersion distribution. Every number is reproduced by an accompanying replication package, and the estimates that could not be reproduced are listed as withdrawn. JEL classification: E31; E42; F31; F33; C12 Note. This working paper reproduces Chapter 4 of the monograph The Independence of the Unit of Account: A Theory of Monetary Function Decoupling with Empirical Evidence and Institutional Design (2026). It is a working paper and has not been peer reviewed. Replication package. The empirical results are documented in an accompanying replication package (135 files) archived at Zenodo: https://doi.org/10.5281/zenodo.23255744 Companion material. One of three working papers drawn from the same monograph: WP1 (axiomatic foundations), WP2 (purchasing-power deviation), WP3 (policy exposure and null results).