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What international monetary system for a fast-changing world economy

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  • Agnès Bénassy-Quéré
  • Jean Pisani-Ferry

Abstract

Though the renminbi is not yet convertible, the international monetary regime has already started to move towards a 'multipolar' system, with the dollar, the euro and the renminbi as its key likely pillars. This shift corresponds to the long-term evolution of the balance of economic weight in the world economy. Such an evolution may mitigate some of the flaws of the present (non-) system, such as the rigidity of key exchange rates, the asymmetry of balance of-payments adjustments or what remains of the Triffin dilemma. However it may exacerbate other problems, such as short-run exchange rate volatility or the scope for ‘currency wars’, while leaving key questions unresolved, such as the response to capital flows global liquidity provision. Hence, in itself, a multipolar regime can be both the best and the worst of all regimes.Which of these alternatives will materialise depends on the degree of cooperation within a multilateral framework.

Suggested Citation

  • Agnès Bénassy-Quéré & Jean Pisani-Ferry, 2011. "What international monetary system for a fast-changing world economy," Working Papers 518, Bruegel.
  • Handle: RePEc:bre:wpaper:518
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. repec:wsi:jicepx:v:03:y:2012:i:03:n:s1793993312500184 is not listed on IDEAS

    More about this item

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements

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