Critical Issues in the Current International Monetary System and Future Prospects

Giovanni Battista Pittaluga and Elena Seghezza
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Giovanni Battista Pittaluga: University of Genoa
Elena Seghezza: University of Genoa

Chapter Chapter 7 in Building Trust in the International Monetary System, 2021, pp 223-265 from Springer

Abstract: Abstract Some scholars argue that in the very near future the dollar will lose its exclusive role as “the” international money. However, at least at present, neither the euro nor the renminbi qualify as international money. Although the dollar, in the post-Bretton Woods period, has maintained, if not indeed strengthened, its dominant role in the international monetary system, the system’s stability has been and is threatened by various factors. The first of these is the large amount of gross capital flows which makes it easier than in the past for the financial cycle to be amplified, leading to credit booms and systemic crises to occur. Secondly, in the current international monetary system it is possible that a shortage of international liquidity may occur. A third critical factor lies in the governance of the international institutions responsible for ensuring the stability of the international monetary system, in particular the IMF. In order to prevent these factors threatening the stability of the international monetary system, reforms are needed.

Date: 2021
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DOI: 10.1007/978-3-030-78491-1_7

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