A Model of the International Monetary System

Emmanuel Farhi and Matteo Maggiori

No 22295, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We propose a simple model of the international monetary system. We study the world supply and demand for reserve assets denominated in different currencies under a variety of scenarios: a Hegemon vs. a multipolar world; abundant vs. scarce reserve assets; a gold exchange standard vs. a floating rate system. We rationalize the Triffin dilemma, which posits the fundamental instability of the system, as well as the common prediction regarding the natural and beneficial emergence of a multipolar world, the Nurkse warning that a multipolar world is more unstable than a Hegemon world, and the Keynesian argument that a scarcity of reserve assets under a gold standard or at the zero lower bound is recessionary. Our analysis is both positive and normative.

JEL-codes: E12 E42 E43 E44 E52 E61 F02 F31 F32 F33 F34 F36 F38 F42 F44 F53 F55 G11 G12 G15 G18 G21 G23 G28 H12 H63 H87 N1 N10 N11 N12 N13 N14 N2 N20 N21 N22 N23 N24 (search for similar items in EconPapers)
Date: 2016-05
New Economics Papers: this item is included in nep-cba, nep-mac, nep-mon and nep-opm
Note: AP CF EFG IFM ITI ME PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Published as Emmanuel Farhi & Matteo Maggiori, 2018. "A Model of the International Monetary System*," The Quarterly Journal of Economics, vol 133(1), pages 295-355.

Downloads: (external link)
http://www.nber.org/papers/w22295.pdf (application/pdf)

Related works:
Journal Article: A Model of the International Monetary System (2018)
Working Paper: A Model of the International Monetary System (2016)
Working Paper: A Model of the International Monetary System (2016)
Working Paper: A Model of the International Monetary System (2016)
Working Paper: A Model of the International Monetary System (2016)
Working Paper: A Model of the International Monetary System (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:22295

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w22295

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().