What International Monetary System for a Fast-Changing World Economy?

Agnès Benassy-Quere and Jean Pisani-Ferry

Working Papers from CEPII research center

Abstract: Though the renminbi is not yet convertible, the international monetary regime has already started to move towards a 'multipolar' system, with the dollar, the Chinese currency and the euro as its key likely pillars. This shift corresponds to the long-term evolution of the balance of economic weight in the world economy. Such an evolution may mitigate some flaws of the present (non-) system, such as the rigidity of key exchange rates, the asymmetry of balanceof- payments adjustments or what remains of the Triffin dilemma. However it may exacerbate other problems, such as short-run exchange rate volatility or the scope for ‘currency wars’, while leaving key questions unresolved, such as the response to capital flows global liquidity provision. Hence, in itself, a multipolar regime can be both the best and the worst of all regimes. Which of these alternatives will materialise depends on the degree of cooperation within a multilateral framework.

Keywords: International monetary system; Capital controls (search for similar items in EconPapers)
JEL-codes: F32 F33 (search for similar items in EconPapers)
Date: 2011-03
New Economics Papers: this item is included in nep-cba, nep-ifn and nep-mon
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Related works:
Chapter: What International Monetary System for a Fast-Changing World Economy? (2011)
Working Paper: What international monetary system for a fast-changing world economy (2011)
Working Paper: What International Monetary System for a Fast-Changing World Economy (2011)
Working Paper: What International Monetary System for a Fast-Changing World Economy (2011)
Working Paper: What International Monetary System for a Fast-Changing World Economy (2011)
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