On the SDR: Reserve Currencies and the Future of the International Monetary SystemBarry Eichengreen and Jeffrey A. Frankel.
No C96-068, Center for International and Development Economics Research (CIDER) Working Papers from University of California at Berkeley Abstract: Thus, neither the total supply nor the total demand for reserves is likely to change dramatically. There is no compelling argument for an SDR allocation to avert a pending global liquidity shortage or to remove an intrinsic instability in the reserve-supply process. There is a consistent argument for an SDR allocation to provide the resources needed to manage national financial crises with international implications--but there are more direct and desirable means of underwriting the relevant facility. European monetary unification, if and when it occurs, will have major implications for the demand and supply of reserves, but there is little reason to think that they will create a significant excess demand for international reserves or destabilize the reserve-supply process. In a future world with a single world currency or three relatively self-contained currency blocs floating against one another, the demand for international reserves would decline or disappear. While there would be a role for the SDR or an instrument like it if the IMF is the world central bank that issues the single world currency, any such scenario is exceedingly remote. Date: Written 1996-06-01 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in Center for International and Development Economics Research (CIDER) Working Papers from University of California at Berkeley |
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