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The Future of the International Monetary System

Author

Listed:
  • Ansgar Belke
  • Kerstin Bernoth
  • Ferdinand Fichtner

Abstract

The financial crisis of 2007/2008 and the current "Euro crisis" challenge the current global monetary system. They drastically reveal the actual system's weaknesses und show the eminent importance of the international monetary system for the stability of markets and national economies. DIW Berlin was commissioned by the Federal Ministry of Finance to research possible alternatives to the existing exchange rate regime. In principle, neither of the two extremes - completely free or fixed exchange rates - is suitable. A mixed system is preferable - with improvements to the status quo, though. An exchange rate regime with few big currency areas, which are linked to each other with flexible exchange rates, should be the aim of reforms. This should correspond to a multi-polar key currency system with the currently dominating US Dollar and the Euro as well as the Chinese Renmimbi as most important actors. These developments should be accompanied by substantial improvements in the regulatory framework of the financial markets. Necessary elements are a reinforced global and especially European economic coordination and an internationally agreed-on, assertive financial market authority.

Suggested Citation

  • Ansgar Belke & Kerstin Bernoth & Ferdinand Fichtner, 2011. "The Future of the International Monetary System," DIW Economic Bulletin, DIW Berlin, German Institute for Economic Research, vol. 1(4), pages 11-17.
    • Handle: RePEc:diw:diwdeb:2011-4-3
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    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.386691.de/diw_econ_bull_2011-04-3.pdf
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    Citations

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    Cited by:

    1. Belke, Ansgar & Beretta, Edoardo, 2019. "From cash to central bank digital currencies and cryptocurrencies: A balancing act between modernity and monetary stability," Ruhr Economic Papers 816, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    2. Ansgar Belke & Edoardo Beretta, 2020. "From cash to central bank digital currencies and cryptocurrencies: a balancing act between modernity and monetary stability," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 47(4), pages 911-938, June.

    More about this item

    Keywords

    International Monetary System; Key Currency; Exchange Rate System; Financial Crisis; International Economic Policy;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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