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Solving the Currency Conundrum

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  • Barry Eichengreen

Abstract

type="main" xml:lang="en"> This paper reviews the prospects for the exchange rate system in different parts of the world. It discounts radical changes like a single world currency and a trio of regional monetary unions: in Europe, where intergration is political as well as economic and financial, the euro should provide the basis for an expanding zone of monetary stability; in the Americas, in contrast, dollarization is likely to be the solution for countries with strong financial links to the USA that find it difficult to run an autonomous monetary policy; and in Asia, continued floating is the only plausible outcome, given the obstacles to the alternatives. (J.E.L.: F3)

Suggested Citation

  • Barry Eichengreen, 2000. "Solving the Currency Conundrum," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 29(3), pages 315-339, November.
    • Handle: RePEc:bla:ecnote:v:29:y:2000:i:3:p:315-339
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    2. Jeannine Bailliu & Robert Lafrance & Jean‐François Perrault, 2003. "Does Exchange Rate Policy Matter for Growth?," International Finance, Wiley Blackwell, vol. 6(3), pages 381-414, November.
    3. Arteta, Carlos, 2002. "Exchange Rate Regimes and Financial Dollarization: Does Flexibility Reduce Bank Currency Mismatches?," Center for International and Development Economics Research, Working Paper Series qt9jb1p0jg, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
    4. Glick, R., 2000. "Fixed or Floating: Is It Still Possible to Manage in the Middle?," Papers pb00-02, Economisch Institut voor het Midden en Kleinbedrijf-.
    5. George S. Tavlas, 2003. "The Economics of Exchange‐Rate Regimes: A Review Essay," The World Economy, Wiley Blackwell, vol. 26(8), pages 1215-1246, August.
    6. Nils Bjorksten & Anne-Marie Brook, 2002. "Exchange rate strategies for small open developed economies such as New Zealand," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 65, March.

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