IDEAS home Printed from https://ideas.repec.org/a/bla/jcmkts/v47y2009ip741-766.html
   My bibliography  Save this article

Dollar Dominance, Euro Aspirations: Recipe for Discord?

Author

Listed:
  • BENJAMIN J. COHEN

Abstract

After nearly a century of dominance of the international monetary system, has the US dollar finally met its match in the euro? When Europe's economic and monetary union (EMU) came into existence in 1999, many observers predicted that the euro would soon join America's greenback at the peak of global finance. Achievements, however, have fallen short of aspiration. After an initial spurt of enthusiasm, international use of the euro actually appears now to be levelling off, even stalling, and so far seems confined largely to a limited range of market sectors and regions. The euro has successfully attained a place second only to the greenback - but it remains, and is likely to remain, a quite distant second without a determined effort by EMU authorities to promote their money's global role. The temptation will surely be great. In practical terms, it is difficult to imagine that EMU authorities will refrain entirely from trying to promote a greater role for the euro. But that, in turn, could turn out to be a recipe for discord with the United States, which has never made any secret of its commitment to preserving the greenback's worldwide dominance. A struggle for monetary leadership could become a source of sustained tensions in US-European relations. Fortunately, however, there seems relatively little risk of a destabilizing escalation into outright geopolitical conflict. Copyright (c) 2009 The Author(s). Journal compilation (c) 2009 Blackwell Publishing Ltd.

Suggested Citation

  • Benjamin J. Cohen, 2009. "Dollar Dominance, Euro Aspirations: Recipe for Discord?," Journal of Common Market Studies, Wiley Blackwell, vol. 47, pages 741-766, September.
  • Handle: RePEc:bla:jcmkts:v:47:y:2009:i::p:741-766
    as

    Download full text from publisher

    File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-5965.2009.02003.x
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Papaioannou, Elias & Portes, Richard & Siourounis, Gregorios, 2006. "Optimal currency shares in international reserves: The impact of the euro and the prospects for the dollar," Journal of the Japanese and International Economies, Elsevier, vol. 20(4), pages 508-547, December.
    2. Gabriele Galati & Philip Wooldridge, 2009. "The euro as a reserve currency: a challenge to the pre-eminence of the US dollar?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 14(1), pages 1-23.
    3. Philip D Wooldridge, 2006. "The changing composition of official reserves," BIS Quarterly Review, Bank for International Settlements, September.
    4. Menzie Chinn & Jeffrey Frankel, 2008. "Why the Euro Will Rival the Dollar," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 55(3), pages 255-278, September.
    5. Adam S. Posen, 2008. "Why the Euro will Not Rival the Dollar," International Finance, Wiley Blackwell, vol. 11(1), pages 75-100, May.
    6. Kamps, Annette, 2006. "The euro as invoicing currency in international trade," Working Paper Series 665, European Central Bank.
    7. Edwin M. Truman & Anna Wong, 2006. "The Case for an International Reserve Diversification Standard," Working Paper Series WP06-2, Peterson Institute for International Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Agnès Bénassy-Quéré & Yeganeh Forouheshfar, 2013. "The Impact of Yuan Internationalization on the Euro-Dollar Exchange Rate," Working Papers hal-00961708, HAL.
    2. Agnès Bénassy-Quéré & Yeganeh Forouheshfar, 2013. "The Impact of Yuan Internationalization on the Euro-Dollar Exchange Rate," PSE - G-MOND WORKING PAPERS hal-00961708, HAL.
    3. Ignazio Angeloni & Agnès Bénassy-Quéré & Benjamin Carton & Christophe Destais & Zsolt Darvas & Jean Pisani-Ferry & André Sapir & Shahin Vallée, . "Global currencies for tomorrow: a European perspective," Blueprints, Bruegel, number 592.
    4. Agnes Benassy-Quere & Yeganeh Forouheshfar, 2013. "The Impact of Yuan Internationalization on the Euro-Dollar Exchange Rate," CESifo Working Paper Series 4149, CESifo Group Munich.
    5. Dermot Hodson, 2016. "Eurozone Governance: From the Greek Drama of 2015 to the Five Presidents’ Report," Journal of Common Market Studies, Wiley Blackwell, vol. 54, pages 150-166, September.
    6. Agnès Bénassy-Quéré, 2015. "The euro as an international currency," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01163926, HAL.
    7. Bénassy-Quéré, Agnès & Forouheshfar, Yeganeh, 2015. "The impact of yuan internationalization on the stability of the international monetary system," Journal of International Money and Finance, Elsevier, vol. 57(C), pages 115-135.
    8. Agnès Bénassy-Quéré, 2015. "The euro as an international currency," PSE - G-MOND WORKING PAPERS halshs-01144371, HAL.
    9. repec:hal:cesptp:hal-00961708 is not listed on IDEAS
    10. Hyoung-kyu Chey, 2013. "The Concepts, Consequences, and Determinants of Currency Internationalization," GRIPS Discussion Papers 13-03, National Graduate Institute for Policy Studies.
    11. Benjamin Cohen, 2012. "The Benefits and Costs of an International Currency: Getting the Calculus Right," Open Economies Review, Springer, vol. 23(1), pages 13-31, February.
    12. Agnès Bénassy-Quéré, 2015. "The euro as an international currency," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01299083, HAL.
    13. repec:hal:cesptp:halshs-01144371 is not listed on IDEAS
    14. Agnès Bénassy-Quéré, 2015. "The euro as an international currency," Working Papers halshs-01144371, HAL.
    15. Agnès Bénassy-Quéré, 2015. "The euro as an international currency," Post-Print halshs-01163926, HAL.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jcmkts:v:47:y:2009:i::p:741-766. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0021-9886 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.