The Debate on the International Monetary System

Lago, Isabelle Mateos y; Duttagupta, Rupa; Goyal, Rishi

doi:10.5089/9781462331369.004

Cited by 43 publications

(24 citation statements)

References 7 publications

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“…L a crisis global que atravesamos ha revivido inquietudes profundamente arraigadas sobre el funcionamiento del "no sistema" monetario internacional vigente (Mateos y Lago et al, 2009). En gran medida a consecuencia de la inherente volatilidad financiera, las relaciones monetarias y económicas se han regionalizado cada vez más, particularmente a partir de la caída del sistema de Bretton Woods.…”

Section: Introductionunclassified

Sistemas regionales de pago. Una perspectiva comparativa sobre Europa y el mundo en vías de desarrollo

Fritz¹,

Biancarelli

Mühlich³

2014

El Trimestre

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El “no sistema” financiero mundial vigente se caracteriza por la inestabilidad. A falta de soluciones globales, ha surgido una serie de convenios regionales de cooperación monetaria para hacer frente a esta inestabilidad. Este artículo se centra en sistemas regionales de pagos como primer paso de cooperación monetaria regional. A fin de evaluar sus posibles contribuciones para lograr una mayor estabilidad macroeconómica de los países miembros, desarrollamos una tipología de los sistemas de pagos y comparamos de manera sistemática iniciativas históricas y actuales de Europa, Asia y América Latina, utilizando como referencia el Plan Keynes original. Mostramos que los sistemas regionales de pagos implican efectos benéficos en la medida en que reducen los costos de transacción del comercio intrarregional y crean incentivos para una mayor cooperación macroeconómica. Sin embargo, su contribución a la estabilización macroeconómica depende del diseño específico de cada acuerdo regional

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Section: Introductionunclassified

Sistemas regionales de pago. Una perspectiva comparativa sobre Europa y el mundo en vías de desarrollo

Fritz¹,

Biancarelli

Mühlich³

2014

El Trimestre

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“…Xiaochuan Zhou, former Director of the Peoples Bank of China, believed that the dollar needs to be replaced with a suitable supranational currency, arguing that no one currency should have reserve status and that a larger basket of currencies would, "achieve the objective of safeguarding global economic and financial stability [5]." Researchers at the IMF agree [33,34]. Russia, Brazil, India, and China (the BRIC countries) have also openly called for reform to the reserve status system and have been diversifying their assets away from the dollar.…”

Section: Literature Reviewmentioning

confidence: 99%

“…IMF white papers have analyzed the issue and made recommendations. In one paper, the SDR is rebranded as a parallel currency if a central bank and government coordination, a liquid market with hedging opportunity, and an operating board could be created in an incremental approach [34]. Subsequently, in 2011, a 40-point plan emerges, "Enhancing International Monetary Stability" that describes how SDRs could be a means of exchange and a store of value [33].…”

Section: Roughly 1trillion Dollars In 2015mentioning

confidence: 99%

The Case for a Single Currency

Barbara¹,

Sandra²

2017

JAEF

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Abstract. Amidst the continued economic woes in the EU, lagging growth in China, the relative strengths and weaknesses of the dollar and other major currencies, and various and sundry articles about banker fraud, derivative-induced collapses, and general economic malaise, there lies an undercurrent of debate about a potential common monetary destiny: a single global currency. This paper evaluates eight currency candidates across the three roles of money and creates a typology of 70 nations using aggregate freedom scores from Freedom House and data from Bank for International Settlements (BIS) and the International Monetary Fund (IMF) to estimate banking system soundness. While some monetary units appear better suited for the monopoly role, none satisfies political criteria. Thirty-five nations scored well on total freedom and banking system stability and may serve as initial adopters if a currency candidate survives the political environment. Implementation concerns remain.Keywords: Global currency; currency; monetary reform; world currency The International Monetary System (IMS)The international monetary system is composed of exchange rate arrangements, capital flows and institutions, rules, and conventions governing the system's operations. Domestic policy generally falls into conformance [1]. Many argue that the international monetary system (IMS) is in desperate need of reform and that something must be done very soon to avoid catastrophe [1,2,3,4,5]. Alessandrini and Fratianni argue that the global instability derives from a deteriorating US dollar [6] and Subacchi called our system of volatile fiscal normalcy, "stable disequilibrium" [4, 668] presumably because it suffers from monstrous complexity, overextensions, burdensome debt and deficits, development here but poverty there, and central banks that have run out of ammunition to salve the world's economic wounds. Exchange rate and balance of payment imbalances, deflation in commodity demand, sudden currency devaluations, latent and patent wars, civil and religious conflicts, terrorism and fiscal imbalance, structural unemployment, and anti-austerity rallies [7] have prompted many to argue the time is right to move toward a single currency. But why would a single unit solve these problems? Exchange rate and balance of payments problems serve as a primary impetus for a single currency while others feel, for reasons of equity and cooperation, it is time to move away from a one currency reserve and create a new unit based on a basket of several existing, strong currencies. MethodologyThe shift to a single currency would represent a policy change of massive global proportions. Every nation, its businesses, every central bank, world bodies, retailers, households, and debt and pension fund holders would undergo huge recalculations in their budgets or portfolios. In the world of geopolitics, nothing is certain and, in modern times, since the modern world has never seen a global currency, there is no direct data by which to measure the success of one currency op...

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“…There has been no real anchor for the global reserve currency and support for the dollar has been largely based on "confidence" in the economic power and capital markets of the US (Teunissen, 2006). The result has been described as a "non-system'" since there are no standard rules governing currency and monetary regimes of economies and the manner in which interventions are applied in case of problems or crises (Gilpin, 1987;D'Arista and Griffith-Jones, 2006;Mateos, Duttagupta, and Goyal, 2009;Visco, 2009). …”

Section: Is It a Non-system?mentioning

confidence: 99%

“…Under the fiduciary dollar standard, the Triffin Dilemma has different characteristics (Ocampo, 2009;Mateos, et al 2009;Padoa-Schioppa, 2009). With global capital flows and more flexible exchange rates, US monetary policy has become more independent.…”

Section: The Triffin Dilemmamentioning

confidence: 99%

The Political Economy of Reducing the United States Dollar’s Role as a Global Reserve Currency

Yap¹

2011

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Asian Development Bank InstituteThe Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI's working papers reflect initial ideas on a topic and are posted online for discussion. ADBI encourages readers to post their comments on the main page for each working paper (given in the citation below). Some working papers may develop into other forms of publication. The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of ADBI, the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.Asian Development Bank Institute Kasumigaseki Building 8F 3-2-5 Kasumigaseki, Chiyoda-ku Tokyo 100-6008, JapanTel:+81-3-3593-5500 Fax:+81-3-3593-5571 URL:www.adbi.org E-mail: info@adbi.org AbstractMany have argued that the major source of the existing global macroeconomic imbalances are the twin deficits of the United States (US). However, there is still a debate about whether the global imbalances indeed pose a significant threat to the world economy. This matter is settled by arguing that the global imbalances acted as a "handmaiden" to the 2008 financial crisis. One way to reduce global imbalances is to reform the international monetary system and reduce the role of the US dollar as a reserve currency. Robert Triffin was one of those critical of this "exorbitant" privilege granted to the US, which makes it both a system maker and privilege taker. The Triffin Dilemma captures the fundamental instability that underlies the dollar reserve system. However, there are major obstacles to this proposal. Some analysts including Triffin cited the US security umbrella as the primary reason the US and its major allies would want to retain the role of the dollar in global trade and finance despite the underlying inequities in the system. This is related to the imbalance in global governance which is largely US-centric. The imbalance in global governance is also reflected in the dominance of the US financial system brought about by the "first-mover advantage".

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The Debate on the International Monetary System

Cited by 43 publications

References 7 publications

Sistemas regionales de pago. Una perspectiva comparativa sobre Europa y el mundo en vías de desarrollo

Sistemas regionales de pago. Una perspectiva comparativa sobre Europa y el mundo en vías de desarrollo

The Case for a Single Currency

The Political Economy of Reducing the United States Dollar’s Role as a Global Reserve Currency

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