The Euro and the U.S. Dollar: Reserve Currency Rivalry in the 21st Century - A Review

Rafael Acevedo () and Maria Lorca-Susino ()
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Rafael Acevedo: Menard Family Center for Economic Inquiry, Creighton University, Omaha - NE, USA; University of Illinois Springfield, USA; Western New Mexico University, Silver City, USA; and Econintech, Miami - FL, USA
Maria Lorca-Susino: Department of Economics, University of Miami, Coral Gables - FL, USA; and Econintech, Miami – FL, USA

Economic Research Guardian, 2024, vol. 14, issue 2, 176-202

Abstract: This article offers a historical overview of the introduction of the euro as a common currency and an in-depth analysis of its process of internationalization, which led it to become the second most widely used reserve currency, after the U.S. dollar. It presents a systematic literature review using a narrative approach to analyze historical data and statistics. Its objective is to determine whether the Euro has become not only an international currency but also a reserve currency capable of challenging the hegemony of the U.S. dollar as the world's primary reserve currency since WWII. The findings suggest that the U.S. dollar's status is shaped by a variety of political, economic, fiscal, military, and social factors that impact its global position. Consequently, if the U.S. government were to implement policies that would undermine this standing, the euro could potentially become the reserve currency of the world.

Keywords: Euro; U.S. dollar; International currency; Reserve currency (search for similar items in EconPapers)
JEL-codes: E42 E49 N14 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:wei:journl:v:14:y:2024:i:2:p:176-202

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