POSSIBLE MEANS AND SOLUTIONS FOR AVOIDING CURRENCY WARS

Mihai Dragu
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Mihai Dragu: University of Craiova Faculty of Economics and Business Administration

Annals of University of Craiova - Economic Sciences Series, 2011, vol. 1, issue 39, 211-216

Abstract: What is needed is a coordinated plan of action, involving all trading partners to ensure a balanced global recovery. The plan must address three interconnected issues: the exchange rate system, global imbalances and excessive reserve accumulation. Few solutions in response to these issues: - create an emergency markets reserve fund, from which member countries would be able to withdraw with no conditionality; - create a global governance mechanism to prevent countries from running excessive current account imbalances; - give surplus countries greater exchange rate flexibility; - enhance the role of the renminbi as an international currency; - strengthen the capacity of IMF to act as a lender of last resort, allowing it to lend to solvent countries against collaterals.

Keywords: currency wars; stability; global governance; global imbalances (search for similar items in EconPapers)
JEL-codes: G01 G12 G18 G28 (search for similar items in EconPapers)
Date: 2011
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