From the Gold Standard to a Bipolar Monetary System
AbstractThis paper argues that the international monetary system will evolve into a bipolar structure consisting of a dollar area and a euro area, each of which attracting other countries to their gravitational centers. A deepening and widening of NAFTA and the EU will enlarge the sphere of influence of both currencies; trade wars will restrict them. The yen is a big question mark. The deep and still unresolved financial crisis in Japan works against the enlargement of the yen; deregulation of its financial markets, with the attendant decline in transaction costs, goes in the opposite direction. Our conclusion is that the yen area will be much smaller than the dollar and the euro area and, consequently, the two large blocs will shape the international monetary system of the 21st century in a critical way. We also discuss feasible scenarios of interaction between currency blocs. A large EMU works in favor of cooperation because fewer players imply lower decision-making costs in reaching a cooperative solution. The relative closeness of the EMU and the United States, on the other hand, works against cooperation and in favor of benign neglect. Exchange-rate agreements are fragile unless supported by strong commitment to economic policy cooperation, and such a commitment may well be premature. The article advocates that the United States and EMU target common inflation rates, an idea that Keynes proposed back in 1923. Copyright Kluwer Academic Publishers 1998
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Springer in its journal Open Economies Review.
Volume (Year): 9 (1998)
Issue (Month): 1 (January)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=100323
evolution of the international monetary system; currency blocs; hierarchical structure; hegemony; cooperation; inflation rate targeting;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Forrest Capie, 1998. "Monetary Unions in Historical Perspective: What Future for the Euro in the International Financial System," Open Economies Review, Springer, vol. 9(1), pages 447-466, January.
- Artis, Michael J & Winkler, Bernhard, 1997. "The Stability Pact: Safeguarding the Credibility of the European Central Bank," CEPR Discussion Papers 1688, C.E.P.R. Discussion Papers.
- Michael D. Bordo, 1993.
"The Bretton Woods International Monetary System: An Historical Overview,"
NBER Working Papers
4033, National Bureau of Economic Research, Inc.
- Michael D. Bordo, 1993. "The Bretton Woods International Monetary System: A Historical Overview," NBER Chapters, in: A Retrospective on the Bretton Woods System: Lessons for International Monetary Reform, pages 3-108 National Bureau of Economic Research, Inc.
- Frederic S. Mishkin & Adam S. Posen, 1998.
"Inflation Targeting: Lessons from Four Countries,"
NBER Working Papers
6126, National Bureau of Economic Research, Inc.
- Michele Fratianni & Andreas Hauskrecht & Aurelio Maccario, 1998. "Dominant Currencies and the Future of the Euro," Open Economies Review, Springer, vol. 9(1), pages 467-492, January.
- Fratianni, Michele & Pattison, John, 1982. "The Economics of International Organizations," Kyklos, Wiley Blackwell, vol. 35(2), pages 244-62.
- Michael Bordo, 1993.
"The Gold Standard, Bretton Woods and other Monetary Regimes: An Historical Appraisal,"
NBER Working Papers
4310, National Bureau of Economic Research, Inc.
- Michael D. Bordo, 1993. "The gold standard, Bretton Woods and other monetary regimes: a historical appraisal," Review, Federal Reserve Bank of St. Louis, issue Mar, pages 123-191.
- Fratianni, Michele & von Hagen, Juergen, 1990. "The European Monetary System ten years after," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 32(1), pages 173-241, January.
- Koichi Hamada, 1998. "The Choice of International Monetary Regimes in a Context of Repeated Games," Open Economies Review, Springer, vol. 9(1), pages 417-446, January.
- Laubach, T. & Posen, A.S., 1997. "Disciplined Discretion: Monetary Targeting in Germany and Switzerland," Princeton Essays in International Economics 206, International Economics Section, Departement of Economics Princeton University,.
- Helmut Frisch, 2003. "The euro and its consequences: What makes a currency strong?," Atlantic Economic Journal, International Atlantic Economic Society, vol. 31(1), pages 15-31, March.
- Pietro Alessandrini & Michele Fratianni, 2009.
"International Monies, Special Drawing Rights, and Supernational Money,"
Mo.Fi.R. Working Papers
26, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
- Pietro Alessandrini & Michele Fratianni, 2009. "International Monies, Special Drawing Rights, and Supernational Money," Working Papers 2009-03, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
- Pietro Alessandrini & Michele Fratianni, 2007.
"Resurrecting Keynes to Revamp the International Monetary System,"
2007-19, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
- Pietro ALESSANDRINI & Michele FRATIANNI, 2008. "Resurrecting Keynes to Revamp the International Monetary System," Working Papers 310, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
- Barry Eichengreen, 1998.
"Exchange Rate Stability and Financial Stability,"
Open Economies Review,
Springer, vol. 9(1), pages 569-608, January.
- Barry Eichengreen., 1997. "Exchange Rate Stability and Financial Stability," Center for International and Development Economics Research (CIDER) Working Papers C97-092, University of California at Berkeley.
- Wilhem Hankel & Andreas Hauskrecht & Bryan Stuart, 2010.
"The Euro-Project at Risk,"
2010-05, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
- Hauskrecht, Andreas & Stuart, Bryan & Hankel, Wilhelm, 2010. "The Euro-Project at Risk," MPRA Paper 23750, University Library of Munich, Germany.
- Hankel, Wilhelm & Hauskrecht, Andreas & Stuart, Bryan, 2010. "The Euro-project at risk," ZEI Working Papers B 04-2010, ZEI - Center for European Integration Studies, University of Bonn.
- Michele Fratianni & Dominick Salvatore & Paolo Savona, 1998. "Ideas for the Future of the International Monetary System: Conclusions and Remarks," Open Economies Review, Springer, vol. 9(1), pages 689-700, January.
- Alberto Predieri, 1998. "Money Markets and Poliarchic Democratic States," Open Economies Review, Springer, vol. 9(1), pages 713-726, January.
- Dominick Salvatore, 1998. "International Monetary and Financial Arrangements: Present and Future," Open Economies Review, Springer, vol. 9(1), pages 375-416, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.