EconPapers    
Economics at your fingertips  
 

A Model of the International Monetary System

Emmanuel Farhi and Matteo Maggiori

No 1543, 2016 Meeting Papers from Society for Economic Dynamics

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: under a Hegemon vs. a multi-polar world; when reserve assets are abundant vs. scarce; under a gold exchange standard vs. a floating rate system; away from or at the zero lower bound (ZLB). We rationalize the Triffin dilemma which posits the fundamental instability of the system, the common prediction regarding the natural and beneficial emergence of a multi-polar world, the Nurkse warning that a multi-polar world is more unstable than a Hegemon world, and the Keynesian argument that a scarcity of reserve assets under a gold exchange standard or at the ZLB is recessive. We show that competition among few countries in the issuance of reserve assets can have perverse effects on the total supply of reserve assets. Our analysis is both positive and normative.

Date: 2016
New Economics Papers: this item is included in nep-ifn, nep-mon and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13) Track citations by RSS feed

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2016/paper_1543.pdf (application/pdf)

Related works:
Journal Article: A Model of the International Monetary System (2018) Downloads
Working Paper: A Model of the International Monetary System (2016) Downloads
Working Paper: A Model of the International Monetary System (2016) Downloads
Working Paper: A Model of the International Monetary System (2016) Downloads
Working Paper: A Model of the International Monetary System (2016) Downloads
Working Paper: A Model of the International Monetary System (2015) Downloads
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:red:sed016:1543

Access Statistics for this paper

More papers in 2016 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().

 
Page updated 2024-01-24
Handle: RePEc:red:sed016:1543