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The “four I's” of the international monetary system and the international role of the euro

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  • Ponsot, Jean-François

Abstract

This article highlights the main sources of negative externalities in the current international monetary system, through a “four I's” approach (instability, incertitude, inequity and insufficiency of the aggregate demand). It then questions the ability of the euro to contribute to a more balanced and sustainable international monetary regime. The euro cannot become a major international currency without long-term growth in the Eurozone, without the creation of a unified marketplace for public debt backed by the European Central Bank, and without shared desire to internationalize the euro, particularly as an invoicing currency for trade.

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  • Ponsot, Jean-François, 2016. "The “four I's” of the international monetary system and the international role of the euro," Research in International Business and Finance, Elsevier, vol. 37(C), pages 299-308.
    • Handle: RePEc:eee:riibaf:v:37:y:2016:i:c:p:299-308
    DOI: 10.1016/j.ribaf.2016.01.004
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    3. Marcelin, Isaac & Mathur, Ike, 2016. "Financial sector development and dollarization in emerging economies," International Review of Financial Analysis, Elsevier, vol. 46(C), pages 20-32.

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    More about this item

    Keywords

    International monetary system; International currency; Dollar dominance; Euro;
    All these keywords.

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F39 - International Economics - - International Finance - - - Other

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