Building a stable and equitable global monetary system

Bilge Erten and Jose Antonio Ocampo

Working Papers from United Nations, Department of Economics and Social Affairs

Abstract: This paper argues that SDRs should become a more relevant instrument of international monetary cooperation. This requires transforming them into a pure reserve asset and the IMF into a fully SDR-funded institution. SDRs would then be issued counter-cyclically and treated as deposits of countries in the IMF, which can in turn lend to countries. This approach would correct basic deficiencies of the current global monetary system. Complementary reforms include a substitution account for an orderly and smooth transition from major reserve currencies to SDRs, and the issuance of SDR-denominated bonds as an alternative to other major short-term assets.

Keywords: Special drawing rights; international monetary system; innovative development finance; governance of the IMF (search for similar items in EconPapers)
JEL-codes: E52 F33 F55 H87 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2012-08
New Economics Papers: this item is included in nep-mon
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:une:wpaper:118

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